Federal reserve policy reappraised ,1951-1959

Daniel S. Ahearn studies the major issues involved in the con troversy of the last ten years about U.S. monetary policy, a debate which has spilled over from aca demic study into the halls of Con gress and the highest echelons of government. The immediate focus is on the question whether the Fed eral Reserve's attitudes and choice of monetary instruments during 1951-1959 helped or hindered the effectiveness of monetary policy. But in answering this question, the study covers practically all the broad issues of monetary policy which have excited so much controversy and brought governmental investi gations in the United States, the United Kingdom, and Canada.

A major analysis of the so-called "bills only" policy includes an ex tensive discussion of experience and compares alternative procedures of foreign central banks. Proposals to abolish discounting are critically analyzed and the question whether more use should be made of changes in reserve requirements as an in strument of credit policy is taken up and answered affirmatively. The failure of the Federal Reserve to make use of selective credit con trols in recent years is reviewed, and a searching analysis is made of the feasibility and effectiveness of such controls.