March 8, 2008

Downturn Tests the Fed’s Ability to Avert a Crisis

Posted in Federal Reserve, Monetary Policy at 10:22 pm by davidprudente

Here’s an interesting article about the Fed and its impact on the economy from today’s New York Times. Sometimes there is no stopping the Business Cycle.

January 30, 2008

Fed Cuts Rate by Half-Point; 2nd Reduction in 8 Days

Posted in Articles, Fiscal Policy, Monetary Policy at 4:02 pm by davidprudente

The Federal Reserve acted again today to stem recessionary pressure on the U.S. economy. As we’ve been discussing in class, The Fed can use monetary policy quickly to affect change in the economy. However, what about Fiscal Policy? Today, President Bush urged The Senate to approve the fiscal stimulus package that congress has approved. How long will it take for fiscal policy to affect change in the economy?

January 18, 2008

Monetary Policy Cheat Sheet

Posted in Assignments, Monetary Policy at 3:26 pm by davidprudente

Today, in class, I handed out this chart which simplifies monetary policy choices. If you missed today, please download the chart and memorize it. It will come in handy.

Also, I want you to consider how changes in interest rates affect Investment spending. I will introduce a graph next week that considers this point.

Ben Bernanke

Posted in Articles, Federal Reserve, Monetary Policy at 6:54 am by davidprudente

Here is an interesting profile of Ben Bernanke, The U.S. Federal Reserve Chairman. This article will appear in Sunday’s New York Times Magazine. It’s a bit long, but contains some interesting background about our Fed Chairman and monetary policy in general.

November 20, 2007

The Fed Forcasts Slower Growth Next Year

Posted in Economic Growth, Federal Reserve, Macroeconomics, Monetary Policy at 5:37 pm by davidprudente

Check out this brief article from today’s Boston Globe. The Fed thinks economic growth will slow over the next year and unemployment will increase. Based on what we’ve discussed in class, what indicators might the Fed be looking at in making this prediction? How’s ’bout I give you 1 extra credit point on tomorrow’s quiz for answering this correctly.

Here’s a little longer article from CNN.

November 12, 2007

The Wizard of Oz

Posted in Gold Standard, Monetary Policy at 9:35 pm by davidprudente

wicked-witch-of-the-west.jpgDuring our discussion today, a student asked why the U.S. does not use gold to back the U.S. dollar. In the discussion and digression I mentioned that nations have, at various times, used many forms of currency including silver. This reminded me that the Wizard of Oz was on TV the other night and that some economists have suggested that it was an allegory for the bimetalism debate of the 1890s. I’ve linked some interesting information from Wikipedia that helps explain both issues. By the way, the U.S. stopped using gold to support the U.S. dollar in 1971. I think I said 1972 in class. Sorry.