91.  Thus monetary policy is the means of controlling inflation, and in the long run, control of the money supply will not affect output and employment.

92.  If monetary policy is successful in reducing aggregate demand, it can lead to a lasting recession.

93.  If inflation or the growth in money supply are higher than anticipated, people will expect a rise in interest rates in anticipation of a tighter monetary policy.

94.  Monetarists also see monetary policy operating through the indirect mechanisms.

95.  Thus V is unpredictable in the short run, and hence the effect of monetary policy on aggregate demand is also unpredictable in the short run.

96.  For these reasons monetarists argue that monetary policy cannot be used for short-run demand management.

97.  With a predictable V in the longer run, monetary policy then becomes the essential means of controlling the long-term path of aggregate demand.

98.  For this reason monetarists favour a longer-term approach to monetary policy.

99.  Eventually, a contractionary monetary policy of this form must work.

100.  We must continue to keep down inflation and watch our monetary policy.