Tom (or anyone else):
Any suggested readings on either the theoretical side (how the capital
controversies affect the monetary arguement) or the segmented financial
capital market issue?
Have a feeling the "limits of financial policy" issue is likely to be a key
policy debate in an upcoming crunch?
Paul A
At 11:16 PM 3/21/00 -0800, you wrote:
>Ellen Frank wrote:
>>
>> I've never understood the reasoning behind operation twist.
>> Although a drop in long-rates would make it cheaper to
>> borrow and stimulate real spending, a rise in short rates,
>> it seems, would make lenders less willing lend long and finance
>> real investment. The reasoning behind operation twist seems
>> to presume that the long and short markets are unconnected.
>> Am I misunderstanding this?
>>
>> Ellen
>
>In other words, is there financial-market segmentation or is there a
>homogeneous loanable-funds market? An argument for the former, leaving
>aside theoretical considerations such as the capital controversies, is that
>central banks and finance ministeries prefer a "bills only" policy.
>
>Edwin (Tom) Dickens
