Money not useful for optimal monetary policy, could harm economy.
The article explores if using money as an indicator is helpful for making optimal monetary policy decisions when information is limited. The researchers found that in the U.S. economy, money doesn't provide useful information for policymakers. If money demand is less variable, it could be helpful for responding to productivity shocks but harmful for money demand shocks. They also showed that when money demand volatility decreases, overall welfare in the economy decreases.