ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Cotton-Many Interests at Work

 fluctuations in interest rates. The job of these speculators is made easy by the authorities who release weekly data without much delay. The US Federal Reserve used interest rate policy to curb growth of liquidity until autumn of 1979. But thereafter it gave up this policy and now its policy is geared to keeping money supply within the target zone with the various monetary control techniques at its disposal. In the process, interest rates arc allowed to find their own level in the market. The US authorities do not appear to be worried about the consequent high instability of interest rates and the adverse effects they have on all those sectors of the economy the activities of which are influenced by interest rates. There is growing disquiet over these policies among the European allies of the US. In an interview published on July 7, the West German Chancellor said that the tight US monetary policy was Foreing European countries to push up their own interest rates more strongly than was desirable for their economies. Chancellor Schmidt further said that West Germany's. success in its fight against inflation since the beginning of the oil crisis was due to a healthy mixture of money-supply, fiscal and budget policies, as well as moderate wage settlements. He categorically staled that his country "will on no account adopt an economic policy dominated by monetarism".

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