Monetary Innovations and Interest Rates.

The article focuses on how weekly changes in the money supply impacts the financial markets. By studying the market reaction to weekly monetary announcements, data on how the economy reacts to these changes can be analyzed. This paper covers the unexpected weekly updates in the money supply minus the expected changes, where expected changes are taken from market survey data. The changes in the interest rates of various terms to maturity are used to evaluate the impact of innovation on financial markets.