Monetary Policy: Exploration and Discussion

14. Is the Fed still using the federal funds rate as its policy target? If so, what is the current target rate? Has the Fed been increasing or decreasing that rate over the past six months? What has been happening to the growth in monetary aggregates?

15. The readings argue that the Fed has learned from both its mistakes and its successes. If it has learned, then monetary policy should be better today than it was in its early years. Can you provide any evidence that it has or has not become better? (Suggestion: have the swings in economic activity gotten smaller or larger with time? Have they become more or less frequent? This is a question that requires some real-world data to answer.)

16. The Federal Reserve publishes its goals. Does what it says agree or disagree with the position taken in the reading? (Here is one place you can find a statement of goals: <>. There may be others. Most students will probably say that the view on this site is very different from the view in the reading. If you are inclined to answer in this way, pretend you are on a debate team and your task is to make the case that these two views are in fact quite close. What would you say? Now that you have figured out that case, do you believe it?)

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