Tag: Monetary policy

Monetary Policy

Posted on | by Kelvin

Write a research project discussing a topic on Monetary Policy
The paper should follow the basic structure:
I. The paper should start with a short introduction/motivation section. Why should anyone care about your topic? Here talk about specifics, current events, politics, etc. (~1 pg). Be sure to establish a clear thesis (argument/focus) and lay out preliminary support you will reference throughout the next section.
– Use sources from reputable publications here (NY Times, Wall Street Journal, Economist, etc)
II. Next, you are expected to review the major contributions on the topic and the current state of the literature, citing at minimum five sources scholarly sources. This should be the bulk of your paper (~3-4 pgs). It is a literature review of your topic. If you have a specific topic (e.g. a specific trade deal, etc) then be sure to generalize your topic for this section. So if you were discussing NAFTA or Brexit, you would want to discuss recent literature on free trade agreements/areas for the literature review. Here you want to discuss general theories on your topic so that you can establish the necessary economic relationships.
– Use scholarly sources here (Journal Articles, Federal Reserve, IMF or NBER Studies, etc)
III. Extension. You just reviewed the literature on a specific subject. Here you should suggest an extension to the current literature (~.5 pgs). What is missing from the literature you reviewed (could be a new data set, case study, research methodology)?
IV. Conclusion. Wrap it up. Tie together the support presented above to call back to main thesis (~ .5 pg).
V. Reference Section that links to in-text citations. Use any citation format you choose (APA, MLA, etc), just be consistent throughout the paper. If you choose to, you can simply footnote within the text and forego this section.

 

 

 

Monetary policy

Posted on | by

 

 

 

 

 

 

Monetary policy is largely determined by the Federal Reserve Bank (Fed) in the United States. For this discussion, let’s cordially debate the necessity of the Fed.

For your initial post address the following:

How does the Fed control the money supply? Be sure to explain how they can expand or restrict the money supply.
How does the banking system create money?
List two to three pros and cons of the Federal Reserve Bank.
What is your conclusion: is the Fed necessary? Support your opinion.

Monetary Policy

Posted on | by

The Federal Reserve is responsible for regulating the U.S. monetary system and setting monetary policy. Monetary policy refers to what the Federal Reserve does to influence the amount of money and credit in the U.S. economy. Policy instruments that affect the quantity of money and credit affect interest rates (the cost of credit) and the performance of the U.S. economy.

The Federal Reserve’s three instruments of monetary policy are open market operations, the discount rate and reserve requirements. The Fed controls the money supply primarily through open-market operations.

Board of Governors of the Federal Reserve System. (n.d.). Retrieved from http://www.federalreserve.gov/

Based on the above summary and the detailed descriptions of monetary policy issues in the textbook (Chapter 34 and Chapter 36) discuss the following questions.

What are the expansionary monetary policy and contractionary monetary policy? What are their policy instruments? How are they used to deal with the inflationary gap and recessionary gap? Which do you think is more appropriate today?
If the Fed wants to increase aggregate demand, it can increase the money supply. If it does this, what happens to the interest rate and rate of inflation? Why might the Fed choose not to respond in this way?
Should monetary policy be made by rule rather than by discretion? Why?
The only thing backing up a nation’s currency (fiat money) in the modern world is faith in the government issuing it. If this is so, what should governments do to maintain a stable currency? How can the Central Bank (the Federal Reserve) build trust in the U.S. currency? What actions would undermine a currency?

Monetary policy

Posted on | by

 

Discuss what monetary policy is. Discuss different instruments of monetary policy. Discuss the impact of expansionary and contractionary monetary policy, specifically the change in interest rate and credit availability, and the process by which these changes impact business’s decision making process.