Whenever a country enters a recession, there are two classes of responses available: fiscal and monetary policy responses. Fiscal policy responses focus on taxation and spending while monetary policy responses refer to Central Bank activity. In the United States, fiscal policy is administered by the Federal Reserve. The Fed is responsible for influencing the quantity of money and credit in the economy. During the Covid-19 pandemic, the Federal Reserve was responsible for issuing treasury bonds to finance fiscal policy decisions.
Disjointed — The Role of the Federal Reserve (Conspiracy)
In a “puff and paint” party, some patrons of a local dispensary have gone a bit too far in the describing the role of the Federal Reserve. While the stated goals of the Fed are price stability and full employment, this hallucination has the Fed at the center of a universe-wide conspiracy. Bloomberg has a podcast that looks at why so many conspiracy theories seem to form around the Federal Reserve.
My former student, Luke, sent me this clip. You should follow him on Twitter!
TED-Ed — What Gives a Dollar Bill It’s Value?
This TedEd video looks at how money supply impacts the value of bills in the economy. As an animated illustrated, it does a great job working through the idea of fiat money and how inflation/deflation is controlled through the money supply.