Reference no: EM132498706

Assignment: Topic: What is next for monetary policy?

Things to consider for the paper:

• Explain monetary policy

• Discuss the various transmission channels of monetary policy (balance sheet, interest rate and credit channels)

• Discuss in detail changes in the Fed's operating procedures since 2008 - interest on reserves

• What are the implications for the effectiveness of monetary policy

• Has monetary policy run out of room to work?

• What next?

• Standing repo facility? Maintain the current system with high bank reserves?

• You could also consider the global implications of monetary policy. For example, ECB policies might influence the effectiveness of US monetary policy. Typically, their policies are similar but what are the short-run effects of the ECB raising rates and the US keeping them steady or lowering them.

Outline:

• Motivate the topic, citing relevant details/statistics.

• Discuss the economic implications for ordinary workers are citizens, and then firms.

• Weave in theory if you feel it's necessary to drive home a point.

• Discuss the macro policy implications: what role can fiscal or monetary policy take. Explain. Don't just say cut rates are increase spending. Be specific.

• In your conclusion, explain the pros and cons to your policy proposal. Be critical of your own thinking.

The target length of each essay is 1000 words; use single space, Times New Roman 12-point font, and 1-inch margins.