It is cursory in textbooks for a reason. It’s just no more complicated than maintaing a supply of money that’s high enough that interests rates are low enough, the people spend to consume and spend to invest. And not too high that you cause inflation and destroy everyone’s savings. That’s it. That’s all there is. Lastly, it certainly appears that no matter what governments’ do, when you add money to an economy, you distort the information carried to everyone in the data we call prices. This distortion of information appears to exacerbate the boom and bust cycle. So no matter what you do there are consequences either way.
The complicated part of monetary policy is that money moves through the economy through a very flexible and very complex network, and every single person in that network has some incentive or other.
So what there is to understand about monetary policy, isn’t the monetary policy itself, which is really quite simple. It’s how money moves through the network of central banks, investment manks, common banks, investors, business, and consumers.
If you start with the treasury issuing notes, and follow the money through to the consumer, then back into the banking system, you will understand it. You will only really understand it though, when you understand human nature pretty objectively.
If you can overlook the ideology the best book that you will find is Rothbard’s The Mystery of Banking. That’s how it works.
Monetary policy is not a problem of macro. Macro is very simple. The problem is the multiplicity of routes that money moves through an economy, and the various incentives people have, when all of them possess only fragmentary information and understanding of the entire process.
The truth is that we are still in the process of discovering how that process works. Very few people know. And when people think they know, in the end it turns out that they’re often wrong.
Most of the nonsense you see on television or read in the news is just that. If you read Mandelbrot, you’ll understand that most activity is noise, not signal, and almost all noise is speculation as changes in the discount rate propagate through the economy. If you study economics long enough, or read Taleb for that matter, you’ll realize it’s a lot of noise. Almost all economic activity is a function of demographics, property rights, and education – all of which are amplified by credit.