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Using monthly data, this paper investigates whether there are differential effects of monetary policy across bank size and business size in Japan, to test the presence of the “bank lending channel” of monetary policy. It also considers that channel for the aggregate of banks. Prior to the end of 1984, support is found for the bank lending channel and also partly for the money channel. The study of the period from 1985 onwards suggests that no channel of monetary policy has been substantially effective in Japan. [ABSTRACT FROM AUTHOR]

This paper reports estimates of the elasticity of various monetary components in the UK by assessing their ability to explain prices. Tests of the Monetarist proposition, that a unit change in a (weighted) monetary aggregate might lead to a unit change in the price level in the long run, and of the appropriateness of the current practice of constructing monetary aggregates by the simple summation of monetary components, are also performed. [ABSTRACT FROM AUTHOR]

In recent years general interest in monetary aggregates has increased significantly. There has, however, been a special emphasis on the derivation of alternatives to the fixed weight indices implied by simple sum aggregates. In this regard, attention has been fixed almost wholly on the Divisia index. This index has attracted the attention of researchers at other Central Banks, and in the case of the Bank of England has led to the publication of a Divisia monetary aggregate. There are naturally many criteria by which the success of a particular monetary aggregate can be assessed. These include the more basic ones of the relationship between the aggregates and indicators of the strength of the macroeconomy, such as the level of output and inflation. However, monetary aggregates will only possess a realistic dimension if the authorities can control or at least have some influence over, the specific monetary aggregate. This might be achieved by some control over base rates of interest. Monetary theory textbooks prefer to envisage the process of monetary control through the Central Bank adjusting the stock of high-powered money in the economy. The money multiplier provides an evaluation of the impact on "money" of an alteration in the high-powered monetary base.