Plain Sense Economics

At about the 6th or 7th week of my Principles of Macroeconomics class we have a kind of broad (though not deep) understanding of how the economy works, how we measure it, and some of the things government does to influence it. We’ve learned about fiscal policy and monetary policy; we have a rough idea [...]

There has been a rash of speeches, articles, and op-ed pieces exploring the origins of the housing bubble and trying to place the blame on the actions of the Federal Reserve. Some of these efforts are honorable – recognizing that we have a responsibility to understand what when wrong and how to avoid repeating those [...]

Gregory Mankiw:
I am delighted that President Obama has decided to reappoint Ben Bernanke as chairman of the Federal Reserve. While there is certainly room for reasonable people to question some of the specific decisions Ben has made, in general he has led the Federal Reserve System with humility, intelligence, wisdom, and grace.
yeh – what he [...]

“If the Federal Reserve is printing all these billions and trillions of dollars, won’t we suffer from inflation?”
I get asked this question a lot lately. First, despite the inference of the video provided by the Bureau and Engraving and Printing (see below), the Fed has not been running the money printing presses for extra shifts [...]

This is probably too much from one blog in a single day (a single hour even!) but this account of the substantive and not so substantive activities at a meeting of the Federal Open Market Committee is fascinating.
From Economix in today’s New York Times

Economix: Come With Me to the F.O.M.C.: A Sneak Peak Into Fed [...]

Harvard University’s Martin Feldstein wrote in the Wall Street Journal today (April 15, 2008 – see article) that the Federal Reserve should stop lowering interest rates. He argues that lower interest rates have a special impact on commodity (i.e. food, oil) prices.
But high unemployment and low capacity utilization would not prevent lower interest rates from [...]

When you hear or read about the Federal Reserve taking action to raise or lower interest rates, here’s what is going on.
The Federal Reserve Open Market Committee (FOMC) is made up of the seven governors of the Federal Reserve System plus the twelve presidents of the district Federal Reserve banks (5 of whom vote at [...]

Students who are taking macroeconomics are introduced to the Federal Reserve System and its dual role of regulating the banking industry and executing monetary policy. As chairman of the Board of Governors for the Federal Reserve Bank, Ben Bernanke becomes the visible point person of the Fed’s policy decisions. The New York Times has a [...]