Money supply endogeneity: 'reserve price setting' or 'reserve quantity setting'?

Tests the validity of 'reserve price setting' and 'reserve quantity setting' behavior of the monetary authorities. Control of the monetary authorities on short-term interest rates as an exogenous policy instrument; Role of market forces in the determination of long-term rates; Dependence of long-term rates on market participants' collective expections of the level of future short-term rates.