is capable of exerting expansionary and contractionary forces on the economy, but it operates with a time lag that is long and variable.The long execution lag of monetary policy makes monetary fine-tuning difficult; the policy may have destabilizing effects.Monetarists in Canada typically argue that monetary policy is a potent force of expansionary and contractionary pressures; monetary policy works with long and variable lags; the Bank is given to sudden and sharp reversals of its policy stance.Monetarists argue from this position that the stability of the economy would be much improved fi the Bank stopped trying to stabilize it. Monetarists thing the Bank ought to expand the money supply year in and year out at a constant rate that is equal to the rate of growth of real income.25 Years of Canadian Monetary Policy...
