Structural changes in the economy also make certain indicators more or less reliable as signals of broad business conditions or prospects. In the early 1980s, for example, the money supply numbers determined short-term interest rates because of Fed policy at that time. A Fed policy change in 1982 broke the link between monetary growth and interest rate changes. In addition, the relationship between changes in money and economic growth broke down, making the money supply numbers less useful for predicting future spending and production. The Federal Reserve now may look at several indicators, including relative interest rate levels, commodity prices, inflation and economic growth along with the money supply.

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