Topic: Monetary Policy

Controlling the Fed

– June 11, 2010

Blame goes to the Fed. They allowed a financial crisis due to lack of regulation and oversight of the banking/financial industry. At least that is the claim of today’s policy makers. While I may not disagree that the Fed holds much of the responsibilit …

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“A Monetary Policy Simulation Game”

– June 11, 2010

The author presents a computer game that puts the player in the role of a central bank governor. The game is a stochastic simulation of a standard reduced form macro model, and the user interacts with this simulation by manipulating the interest rate.

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“Monetary Policy Rules and Business Cycles”

– June 11, 2010

“Basic features of business cycle properties under both exogenous and endogenous monetary policy rules are examined in calibrated dynamic stochastic general equilibrium models with nominal rigidities (the nominal wage contract model, the monopolistic c …

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“Federal Reserve chief says U.S. budget on road to peril”

– June 10, 2010

“Federal Reserve Chairman Ben Bernanke warned Wednesday that “the federal budget appears to be on an unsustainable path,” but also recognized that an “exceptional increase” in the deficit had been necessary to ease the pain of recession. In nearly two …

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“Bernanke Says Fed to Take Necessary Steps on Growth”

– June 9, 2010

“Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank will act as needed to aid financial stability and economic growth after restarting emergency currency-swaps to help contain Europe’s debt crisis. ‘Our ongoing international cooperatio …

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“Treasury Three-Year Yield Rises From Near 2010 Low Before Sale”

– June 8, 2010

“Bernanke said yesterday at a Washington event that while the Fed will raise interest rates from a record low before the economy returns to “full employment,” officials don’t know when the process will start. The banking system isn’t fully healthy and …

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“Fed Bank Chief Calls for Interest Rate Hikes”

– June 4, 2010

“Thomas Hoenig, the head of the Federal Reserve Bank of Kansas City, is cementing his reputation as the best friend of savers with money in the bank. Hoenig, who has a seat on the Fed’s interest-rate committee, on Thursday called for the central bank t …

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What Financial Re-Regulation?

– June 3, 2010

“In two weeks, I am supposed to speak on a panel entitled “Financial Re-regulation.” My question is, what re-regulation? To me, re-regulation means you would reverse some step that you took toward deregulation. But the new financial reform bill does no …

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Implicit Inflation

– June 3, 2010

The problem of inflation is a major concern in economics; it gives rise to economic discoordination and affects the distribution of wealth. Among most economists, inflation is generally seen just as a sustained increase in the level of prices, and not …

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“Bernanke Continues Fight Against More Fed Scrutiny”

– June 2, 2010

“With Congress getting close to finalizing an overhaul of the nation’s financial-regulatory system, Federal Reserve Chairman Ben Bernanke weighed in against provisions in the proposed legislation that would subject the central bank to more political sc …

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Bank of Canada Raises Overnight Rate

– June 2, 2010

“The Bank of Canada today announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 1/2 per cent. The Bank Rate is correspondingly raised to 3/4 per cent and the deposit rate is kept at 1/4 per cent, thus …

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Crisis Risk Moves from Credit to Politics

– June 2, 2010

“The causes of the global financial crisis of 2008 were almost entirely flaws in the credit system based on leverage, exotic financial instruments, and a sharp drop in American housing prices. Just as that cycle has begun to end,  and GDP in major nati …

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