While the monetary base might be a useful concept for analyzing variation in the money supply, it is a misleading indicator of the central bank's monetary policy. Three intervening institutional considerations are: (1) regulation of interest rates and the central bank's trading in LGS assets with the banks; (2) Government banking with the central bank; and (3) the role of Australian savings banks. Institutional change would increase the authorities' control over the money supply.
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2.
Dewald, W., 1967, “Indicators of Monetary Policy”, Economic Papers, 25, 16–43.
3.
Dewald, W., 1971, “A Model of the Australian Money Supply Process”, paper presented to the Western Economics Association.
4.
Norman, P., and D. Purvis, 1975, “The Behaviour of Monetary Aggregates in Australia Some New Evidence”, unpublished manuscript, Reserve Bank of Australia; also presented at the Fifth Conference of Economists, Brisbane, Queensland, August, 1975.
5.
Sharpe, I., 1973, “A Model of the Sources of Growth of the Australian Money Supply”, unpublished manuscript. University of Sydney.
6.
Sharpe, I., 1975, “A Framework for Analysis of the Money Supply Process in Australia”, University of Sydney, Working Papers in Economics 1.
7.
Taylor J., 1974, “A Model of the Australian Money Supply”, unpublished manuscript.
8.
Thiessen, G., 1975, “Some Criticisms of the Concept of Private Sector Liquidity and the Use of the Formation Table”, unpublished manuscript.
