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We review the literature regarding the impact of financial innovation on the monetary transmission mechanism and on the way the central bank can achieve its ultimate goal, that is to control the price level. We argue that, although the form of central bank instruments and current methods for implementing monetary policy may change, the goals that the policy makers try achieve by employing these instruments remain valid, and achievable. JEL Codes: E42, E58, E31, E51, E52
Jan Marc Berk (Wed,) studied this question.