Monetary Policy

Case Study # 101550

Economics > Macro
Political Science > Fiscal Policy (economy)

Monetary Policy

This paper examines monetary policy and macroeconomic stability.

1,801 words () | 7 sources | APA | 2008 United States

Paper Summary:

The paper analyzes the role of money when achieving economic objectives such as economic growth, controllable inflation and low unemployment rates. The paper explores whether there are alternatives to monetary policy and if they are effective. The paper researches which tool will reach the goals at a faster rate and looks at whether developed countries like the United States use monetary policy frequently. The paper uses the Federal Reserve as a case/example for the analysis presented.

Outline:
Introduction
The Money Creation Process
A Description of Monetary Policy
Macroeconomic Stability and Monetary Policy
Monetary Policy Efficiency
Business Operations and Monetary Policy

From the Paper:

"Monetary policy is a tool utilized by policy makers to correct inflationary or recessionary gaps. The tools of monetary policy are used throughout an economy for other purposes; hence there are drawbacks to using it for macroeconomic stability. The issue that should not be trivialized is whether the marginal benefit from monetary policy exceeds the marginal cost of using the tools of monetary policy. If this true, then its best for policy makers to undertake the action, the contrary holds true."

Sample of Sources Used:

Board of Governors of the Federal Reserve System (2006). "Monetary Policy Report to Congress". Federal Reserve Board Publications. Retrieved January 26, 2007 from http://www.federalreserve.gov/boarddocs/hh/2006/july/fullreport.pdf
Edwards, Cheryl (1997). "Open Market Operations in the 1990s". Federal Reserve Bulletin, November 1997. Retrieved Jan 26, 2007 from http://www.federalreserve.gov/pubs/bulletin/1997/199711lead.pdf
Federal Reserve Bank (2004). "U.S. Monetary Policy: An Introduction". Federal Reserve Bank of San Francisco Publications. Retrieved January 25, 2007, from http://www.frbsf.org/publications/federalreserve/monetary/MonetaryPolicy.pdf
Klee, E. and Weinbach, G. (2006). "Profits and Balance Sheet Developments in U.S. Commercial Banks in 2005". Federal Reserve Bulletin, June 2006. Retrieved Jan 26, 2007 from http://www.federalreserve.gov/pubs/bulletin/2006/bankprofits/0606bankprofit.pdf
McConnell, C. and B., Stanley (2005). Macroeconomics 16th Edition. New York: McGraw-Hill.