Tuesday, October 4, 2011

Monetary policy

Here's a little article I found that talks about the FED and the Monetary Policy. One of the main problems with the monetary policy that we discussed in class was that it's very difficult to get people to spend and boost the economy when they don't feel like they have the money to spend.

http://www.frbsf.org/publications/federalreserve/monetary/affect.html

1 comment:

  1. I believe that the problem is that many people actually don't have the same amount of spending money as they used to have. This is partly due to unemployment, salary cuts, and the moderation in their credit card usage especially for houses. housing is the biggest asset most people purchase. This "boosting the economy through active expenditure" is not possible unless people borrow even more money from wherever they can find in the belief that there would be a brighter future that enable them to pay the debt off... At this point, I don't think that it is likely for it to take place.

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