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 [...]

“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 [...]

Our focus during the banking/credit crisis has been on the supply side of the equation – shaking the tree, opening the spigot (pick your metaphor) to release more money into the economy for borrowers.
We’re hearing more opinions now that our attention needs to turn to fiscal policy initiatives, which largely deal with the demand side. [...]

My head’s spinning with all of the once-in-a-lifetime monetary policy and other government action going on. Even so, this is a good moment to stop and review, in simple terms, what kind of problems the Federal Reserve and the Treasury Department are dealing with and what steps they are taking. …very simple terms…
Liquidity / [...]

This segment on NPR highlights the discussions taking place in Washington as the prospects for a recession increase. Reporter Jim Zarolli describes a panel discussion among notable economists and policy experts, including Harvard’s Martin Feldstein, and past Treasury Secretary Robert Rubin – on the topic of using fiscal policy to stimulate the economy.
As a quick [...]

When economic times are tough, we often look to the government to help steer us into better conditions. When a real recession hits and unemployment grows sufficiently to be a topic of conversation and news articles, government (by which I mean here Congress and the President) can provide some palliative relief – treating the symptoms. [...]

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 [...]