Monetary Economics

  1. The Conduct of Monetary Policy: Tools and Targets
    1. The Market for Reserves and the Federal Funds Rate
      1. Demand for Reserves
        1. Required Reserves
          1. Reserve Requirements
            1. Deposit Base
            2. Excess Reserves
              1. Precautionary Demand
                1. Interest Rate Considerations
                2. Factors Influencing Demand
                  1. Payment Flows
                    1. Uncertainty
                      1. Regulatory Requirements
                    2. Supply of Reserves
                      1. Open Market Operations
                        1. Permanent Operations
                          1. Temporary Operations
                          2. Discount Lending
                            1. Primary Credit Rate
                              1. Lending Procedures
                              2. Other Federal Reserve Operations
                                1. Treasury Services
                                  1. Foreign Exchange Operations
                                2. Equilibrium in the Market for Reserves
                                  1. Determination of the Federal Funds Rate
                                    1. Supply and Demand Intersection
                                      1. Rate Corridor System
                                      2. Role of Interest on Reserves
                                        1. Floor System Implementation
                                          1. Excess Reserve Remuneration
                                          2. Intraday Dynamics
                                            1. Payment System Flows
                                              1. End-of-Day Settlement
                                          3. Conventional Monetary Policy Tools
                                            1. Open Market Operations
                                              1. Types of Operations
                                                1. Outright Purchases and Sales
                                                  1. Repurchase Agreements
                                                    1. Reverse Repurchase Agreements
                                                    2. Implementation Process
                                                      1. Primary Dealers
                                                        1. Auction Procedures
                                                        2. Impact on Reserves and Interest Rates
                                                          1. Direct Effects
                                                            1. Signaling Effects
                                                          2. Discount Policy and the Discount Rate
                                                            1. Types of Discount Lending
                                                              1. Primary Credit
                                                                1. Secondary Credit
                                                                  1. Seasonal Credit
                                                                  2. Discount Rate Setting
                                                                    1. Relationship to Federal Funds Rate
                                                                      1. Regional Bank Recommendations
                                                                      2. Signaling Effects
                                                                        1. Policy Communication
                                                                          1. Market Expectations
                                                                        2. Reserve Requirements
                                                                          1. Calculation and Enforcement
                                                                            1. Reserve Computation Periods
                                                                              1. Maintenance Periods
                                                                                1. Carry-Over Provisions
                                                                                2. Impact on Bank Behavior
                                                                                  1. Cost of Funds
                                                                                    1. Lending Capacity
                                                                                    2. Historical Use
                                                                                      1. Frequency of Changes
                                                                                        1. Effectiveness Issues
                                                                                    3. Unconventional Monetary Policy Tools
                                                                                      1. Quantitative Easing (QE)
                                                                                        1. Asset Purchases
                                                                                          1. Large-Scale Asset Purchases
                                                                                            1. Maturity Extension Programs
                                                                                              1. Sectoral Purchases
                                                                                              2. Transmission Mechanisms
                                                                                                1. Portfolio Balance Effects
                                                                                                  1. Signaling Effects
                                                                                                    1. Market Functioning
                                                                                                    2. International Experiences
                                                                                                      1. Federal Reserve Programs
                                                                                                        1. European Central Bank Programs
                                                                                                          1. Bank of Japan Programs
                                                                                                        2. Forward Guidance
                                                                                                          1. Communication Strategies
                                                                                                            1. Odyssean vs. Delphic Guidance
                                                                                                              1. State-Contingent Guidance
                                                                                                                1. Calendar-Based Guidance
                                                                                                                2. Managing Expectations
                                                                                                                  1. Interest Rate Expectations
                                                                                                                    1. Inflation Expectations
                                                                                                                    2. Effectiveness and Limitations
                                                                                                                      1. Credibility Issues
                                                                                                                        1. Communication Challenges
                                                                                                                      2. Negative Interest Rate Policy (NIRP)
                                                                                                                        1. Implementation and Rationale
                                                                                                                          1. Breaking the Zero Lower Bound
                                                                                                                            1. Stimulating Demand
                                                                                                                            2. Effects on Banks and Markets
                                                                                                                              1. Bank Profitability
                                                                                                                                1. Money Market Functioning
                                                                                                                                2. International Experiences
                                                                                                                                  1. European Central Bank
                                                                                                                                    1. Bank of Japan
                                                                                                                                      1. Swiss National Bank
                                                                                                                                    2. Targeted Long-Term Refinancing Operations (TLTROs)
                                                                                                                                      1. Design and Objectives
                                                                                                                                        1. Conditional Lending
                                                                                                                                          1. Credit Easing
                                                                                                                                          2. Impact on Lending
                                                                                                                                            1. Bank Lending Channels
                                                                                                                                              1. Credit Allocation
                                                                                                                                            2. Yield Curve Control
                                                                                                                                              1. Target Rate Setting
                                                                                                                                                1. Bond Purchase Programs
                                                                                                                                                  1. Market Intervention Mechanisms
                                                                                                                                                2. The Goals of Monetary Policy
                                                                                                                                                  1. Price Stability
                                                                                                                                                    1. Inflation Targeting
                                                                                                                                                      1. Target Levels
                                                                                                                                                        1. Symmetric vs. Asymmetric Targets
                                                                                                                                                          1. Flexible vs. Strict Targeting
                                                                                                                                                          2. Deflation Risks
                                                                                                                                                            1. Deflationary Spirals
                                                                                                                                                              1. Zero Lower Bound Issues
                                                                                                                                                              2. Measuring Inflation
                                                                                                                                                                1. Consumer Price Index
                                                                                                                                                                  1. Personal Consumption Expenditures
                                                                                                                                                                    1. Core vs. Headline Inflation
                                                                                                                                                                  2. High Employment and Output Stability
                                                                                                                                                                    1. Full Employment Objective
                                                                                                                                                                      1. Natural Rate of Unemployment
                                                                                                                                                                        1. Maximum Employment
                                                                                                                                                                        2. Output Gap
                                                                                                                                                                          1. Potential Output Estimation
                                                                                                                                                                            1. Cyclical vs. Structural Unemployment
                                                                                                                                                                            2. Employment-Inflation Tradeoffs
                                                                                                                                                                              1. Phillips Curve Relationships
                                                                                                                                                                                1. NAIRU Concepts
                                                                                                                                                                              2. Economic Growth
                                                                                                                                                                                1. Long-Term Growth vs. Short-Term Stabilization
                                                                                                                                                                                  1. Productivity Growth
                                                                                                                                                                                    1. Capital Formation
                                                                                                                                                                                    2. Monetary Policy and Growth
                                                                                                                                                                                      1. Real vs. Nominal Effects
                                                                                                                                                                                        1. Neutrality of Money
                                                                                                                                                                                      2. Financial Market Stability
                                                                                                                                                                                        1. Preventing Bubbles and Crises
                                                                                                                                                                                          1. Asset Price Monitoring
                                                                                                                                                                                            1. Macroprudential Tools
                                                                                                                                                                                            2. Systemic Risk Management
                                                                                                                                                                                              1. Too-Big-to-Fail Issues
                                                                                                                                                                                                1. Interconnectedness
                                                                                                                                                                                              2. Interest Rate Stability
                                                                                                                                                                                                1. Volatility and Predictability
                                                                                                                                                                                                  1. Term Structure Effects
                                                                                                                                                                                                    1. Market Functioning
                                                                                                                                                                                                    2. Gradualism in Policy Changes
                                                                                                                                                                                                      1. Smoothing Objectives
                                                                                                                                                                                                        1. Market Expectations
                                                                                                                                                                                                      2. Foreign Exchange Market Stability
                                                                                                                                                                                                        1. Exchange Rate Objectives
                                                                                                                                                                                                          1. Competitive Devaluation
                                                                                                                                                                                                            1. Currency Wars
                                                                                                                                                                                                            2. International Coordination
                                                                                                                                                                                                              1. G7 and G20 Cooperation
                                                                                                                                                                                                                1. Swap Line Arrangements
                                                                                                                                                                                                            3. Monetary Policy Strategy: The Role of a Nominal Anchor
                                                                                                                                                                                                              1. Targets and Instruments
                                                                                                                                                                                                                1. Operating Instruments
                                                                                                                                                                                                                  1. Policy Interest Rates
                                                                                                                                                                                                                    1. Federal Funds Rate
                                                                                                                                                                                                                      1. Discount Rate
                                                                                                                                                                                                                      2. Reserve Balances
                                                                                                                                                                                                                        1. Quantity vs. Price Targeting
                                                                                                                                                                                                                      3. Intermediate Targets
                                                                                                                                                                                                                        1. Monetary Aggregates
                                                                                                                                                                                                                          1. M1 and M2 Targeting
                                                                                                                                                                                                                            1. Velocity Instability
                                                                                                                                                                                                                            2. Exchange Rates
                                                                                                                                                                                                                              1. Fixed vs. Flexible Rates
                                                                                                                                                                                                                                1. Currency Pegs
                                                                                                                                                                                                                                2. Interest Rates
                                                                                                                                                                                                                                  1. Term Structure Targeting
                                                                                                                                                                                                                                    1. Real vs. Nominal Rates
                                                                                                                                                                                                                                  2. Ultimate Goals
                                                                                                                                                                                                                                    1. Inflation Targets
                                                                                                                                                                                                                                      1. Employment Objectives
                                                                                                                                                                                                                                        1. Output Stabilization
                                                                                                                                                                                                                                      2. The Taylor Rule
                                                                                                                                                                                                                                        1. Formula and Parameters
                                                                                                                                                                                                                                          1. Interest Rate Response
                                                                                                                                                                                                                                            1. Inflation Gap
                                                                                                                                                                                                                                              1. Output Gap
                                                                                                                                                                                                                                              2. Application in Policy Decisions
                                                                                                                                                                                                                                                1. Descriptive vs. Prescriptive Use
                                                                                                                                                                                                                                                  1. Parameter Estimation
                                                                                                                                                                                                                                                  2. Variations and Extensions
                                                                                                                                                                                                                                                    1. Forward-Looking Rules
                                                                                                                                                                                                                                                      1. Asset Price Augmented Rules
                                                                                                                                                                                                                                                        1. International Considerations

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                                                                                                                                                                                                                                                  4. Monetary Theory: The Demand for Money and Interest Rates