Antenna Theory: Pt. 2 by Robert E. Collin, Francis J. Zucker

By Robert E. Collin, Francis J. Zucker

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Since monetary policy was in its turn also just one factor impinging upon aggregate demand, and an unimportant one at that, it had no special role to play vis-a-vis inftation in the economics of the 1960s. The macroeconomics of the neoclassical synthesis thus downgraded monetary variables, and yet the first round of the monetarist challenge to that doctrine involved an attack on the effectiveness of monetary policy as a device for 'fine tuning' the economy based on the proposition that its effects were subject to 'long and variable' time lags.

From the perspective of the central banks, the strong position of the Commission from the very beginning was somewhat disappointing. They had opted and still opt for a procedure strengthening the autonomy of monetary policy from the outset, ao; a first step towards an independent monetary system in Europe. 3 THE MAIN QUESTIONS Although the task of the Committee was defined by the wide topic of monetary and economic union, there is no doubt that the central questions are those of monetary integration (Baer, 1991).

Will it be possible and necessary to meet the postulate of a more and more autonomous monetary policy in the stages of the integration process? Or does, at least temporarily, a more dominant role of the European Commission and Finance Ministries in the conduct of Europe's monetary policies have to be accepted? (iii) The third topic refers to the legal framework that will be chosen for the future integration process. One option, analogous to the ideas of the Werner Report (1970), is developing a comprehensive agreement setting out a mandatory schedule of all intermediate steps, including the passage to the final stage.

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