Over the three years from September 2008 to September 2011, the Fed increased the size of the monetary base by a total of 183.7%, and produced total NGDP growth of 5.6%.
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Interest rate fluctuation has worked to make money artificially cheap in certain periods since the Fed inherited total control of monetary policy in 1971 after the dollar was delinked from gold.
Adjusted for variations in purchasing power parity, the ascent of emerging markets is even more impressive: the International Monetary Fund forecasts that the total GDP of emerging markets could overtake that of the developed economies in 2014.
Total employment is a real variable, and monetary actions can only impact nominal variables.
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According to the International Monetary Fund, it accounts for about 12% of the total.
The latest released minutes of the Exchange Fund Advisory Committee reveal that the panel rejected a proposal to dollarize the "aggregate balance" or the total of the clearing accounts banks maintain with the Monetary Authority, the de facto central bank.
But even with that massive and unprecedented cancelling of the debt of a developed economy, the total debt of the Greek government is estimated by the International Monetary Fund to be falling from an eye-watering 161% of GDP in 2011 to a still totally unsustainable 153% of GDP in 2012 - from where it is forecast to bounce back to 161% of GDP next year.
The combined total of covered money substitutes plus currency is what economists call the monetary base, and by definition completely under the control of the Federal Reserve.
The implication of my view of the way monetary policy works for the assets of the Fed is that the current level of total assets is a result of past policy and that continued slow growth is needed to support the real economy going forward.
Louis Fed president James Bullard has been a proponent of varying the rate of asset purchases to reflect the level of accommodation, while in the past Bernanke has said the total size of their balance sheet, rather than its rate of change, determined the level of monetary easing.
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