Abstract
This chapter discusses the main techniques available to the authorities for controlling the stock of money. The currency component of the money stock is relatively unimportant, and no attempt is made by the authorities to control it for the purpose of altering the total stock of money. The chapter highlights the techniques for the control of deposits. Broadly, there are two approaches to the control of deposits. The first is to use instruments of policy that act directly upon the demand for or supply of deposits themselves. The other is to use instruments that are aimed at one or more of the so-called supply side counterparts of the volume of deposits. The chapter explains the difference between the two broad approaches and considers the actual techniques. Deposits appear on the liabilities side of the balance sheets of monetary institutions. However, they must be matched in total by credit counterparts featuring on the assets side of those same balance sheets. The chapter presents a representation of the monetary sector's balance sheet. It presents a classification of techniques for controlling the money supply.
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