(Macro) Episode 32: Monetary Policy

(Macro) Episode 32: Monetary Policy

This video gives a brief overview of the Fed’s three monetary policy tools: Open Market Operations, the Required Reserve Ratio, and the Discount Rate. “(Macro) Episode 32: Monetary Policy” by Dr. Mary J. McGlasson is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
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25 Responses to “(Macro) Episode 32: Monetary Policy” Subscribe

  1. xxxjawad786 September 14, 2012 at 11:24 am #

    These are the types of videos that deserve millions of hits.

  2. diegonowasha September 14, 2012 at 11:47 am #

    I love ur videos, could u be my Econ teacher? Mine is terrible

  3. trishalovesdmg September 14, 2012 at 12:18 pm #

    Your videos are brilliant :) thank you for uploading them :)

  4. Romeodxb September 14, 2012 at 1:02 pm #

    I love your videos, its simple, precise and to the point. 

  5. itempus September 14, 2012 at 1:45 pm #

    THANKS SO MUCH! :D

  6. mjmfoodie September 14, 2012 at 1:56 pm #

    Like any other commodity, if you increase the supply, he value fall; if you decrease the supply, the value rises…

  7. bladewolf390 September 14, 2012 at 2:37 pm #

    how does Expansionary and Contractionary monetary policy affect the exchange rate in a country…

  8. bladewolf390 September 14, 2012 at 2:40 pm #

    then the gov’t will search for another buyer… and its not only banks gov’t sell to also corporation…

  9. Tanner Pain September 14, 2012 at 3:03 pm #

    0:01

  10. cinqueottavi September 14, 2012 at 3:23 pm #

    What’s happen if BANK 1 in the case of “OMO selling” doesn’t want to by from FED the bonds/security?

  11. kenwkto September 14, 2012 at 3:29 pm #

    very good explanations thanks!
    

  12. ChulaKirby September 14, 2012 at 3:48 pm #

    The Federal Reserve does not decrease it’s holdings of cash to buy the treasuires. It’s brings up Wells Fargo Reserve account and electronically punches in $1,000,000.00. Another way of saying it, they created the money with some key strokes on a computer. How much can they create? How how does the number system go? infinite? So they did not decrease their holdings of cash. They created the money from thin air or as Bernanke says “electronic printing press”.

  13. mjmfoodie September 14, 2012 at 3:59 pm #

    “Episode 30: Creating Money”….

  14. Soldier957 September 14, 2012 at 4:42 pm #

    Hi. I cann’t find your episode on money creation on your channel. What’s the name of that video?

  15. MTran0708 September 14, 2012 at 4:45 pm #

    wow this is amainzg!! excellent descriptions, thnak you so much

  16. bourneyesterdayi September 14, 2012 at 5:25 pm #

    I LOVE the pictures…

  17. fanaticastype September 14, 2012 at 6:07 pm #

    this is good. bravo

  18. ryno9292 September 14, 2012 at 6:52 pm #

    Start with the bank selling OMOs That way buying them (back) makes much more sense.

  19. Trimbler00 September 14, 2012 at 7:01 pm #

    Love this. I’m doing an essay on the Fed and I’m an English major!

  20. Michael Guzman September 14, 2012 at 7:32 pm #

    These basic policies look good on paper, or in this case video, but they haven’t done too much to stimulate the local economy.

  21. mjmfoodie September 14, 2012 at 8:00 pm #

    TOO LATE!! I should have checked my email earlier! Theoretically, you are correct; if no one wanted to “lay ball,” so to speak, OMOs wouldn’t work. But the reality seems to be that there is always someone willing to buy & sell.

  22. foti658 September 14, 2012 at 8:16 pm #

    4 hours leftttttt…

  23. foti658 September 14, 2012 at 8:32 pm #

    xaxa me too…

  24. foti658 September 14, 2012 at 9:30 pm #

    I have a question : it might be stupid but. . . how the transaction of the FED making open market purchases or sales occurs. I mean, let’s say with an open market purchase, the commercial banks may not be willing to sell there securities to the fed or in case of open market sales, banks may not be willing to buy the securities, what happens then. I don’t know if my question make sense, but I have my final exam in money and banking in about 12 hours, so an answer would be great, thank you.

  25. mjmfoodie September 14, 2012 at 10:01 pm #

    1 sec ago

    Well, they are two different things:

    1) fixing high levels of inflation means we would slow things down, or take money OUT of the economy – this is done when the Fed sells securities. The Fed ends up with the cash, the economy ends up with the securities.

    2) Trying to fix a recession means we would speed things up, or put money INTO the economy – this is done when the Fed buys securities. The Fed ends up with the securities, the economy ends up with the cash.

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