Re: [Pen-l] M-3 supply and our current crisis

["Jim Devine" <jdevine03@xxxxxxxxx>]

Bill Lear wrote:

> But, you say "much more", so does that mean that M3 growth could have
> partly caused it?  Why exactly does the Fed have no control over M3?

to some extent, M3 rises as the Fed cuts interest rates, so it can be
seen as partly a result of policy. Thus, it can be seen as a part
cause.

M3 isn't controlled by the Fed because it's primarily not a matter of
assets subject to reserve requirements. It's the latter that gives the
Fed control.

> So, no evidence (I couldn't find any) that Greenspan's motive was to
> get people to buy more houses?

I bet that he said (perhaps to himself), "if fighting this 2001
recession involves people buying more houses, so be it."
-- 
Jim Devine /  "Nobody told me there'd be days like these / Strange
days indeed -- most peculiar, mama." -- JL.
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