Macroeconomic Activity and Monetary Policy Actions: Some Preliminary Evidence.

Monetary policy is conducted through open market operations, loans at the discount window, and changes in the reserve requirement structure. The purpose of this paper is to formally investigate the notion that the effect of changes in reserve requirement ratios is different from the effect of other policy tools. This is accomplished by decomposing the monetary base into those changes caused by changes in reserve requirement ratios and those caused by other monetary policy actions. Some preliminary evidence suggesting differential real effects from the policy tools is provided. Copyright 1992 by Ohio State University Press.