The Review of Economics and Statistics Vol. 40 No. 2 1958
A Note on Incentive Taxation in West Germany, 1948-1955
Abstract
bank sector has involved an increase in velocity.19 Nor do we today have any real means for guarding against such increases in the effective money supply. Depending on just how large is the group of borrowers that has access to funds through loans, it may be advisable to make provision for the direct control of bank lending. But it is unlikely, in any event, that funding would be an acceptable solution here. A successful funding would necessarily involve greater pressure on the longterm market in succeeding periods of credit restraint, and this may be undesirable from other viewpoints. More importantly, when could a funding operation be undertaken? Admittedly, it could not be attempted in boom periods; but to undertake such a move in slack periods would mean doing away with any interest-incentive to invest in the very market (long-term) in which one might reasonably expect some interest elasticity. Finally, there may well be an inconsistency between the bills only doctrine and funding, since many supporters of the former including, apparently, the Federal Reserve argue that the bill supply must be increased in the interest of a broad and active money market. 20 It would seem therefore that the British controversy is of interest, not because it has given us any solutions, but because it has helped to focus issues in this country.
- DOI
- 10.2307/1925034
- Volume
- 40
- Issue
- 2
- Pages
- 183
- Sources
- openalex crossref