A central bank stands at the top of the banking system and controls some of the levers that then affect the kind of lending and borrowing that other banks further down stream will do. The federal reserve sets interest rates, which is an interest rate at which banks can borrow from each other. And so say they raise the federal funds rate, then a bank that's looking to make a mortgage loan will find itself paying more to access luquidity. In turn, in their business and consumer loaning lending, will pass on credit at terms influenced by the Central Bank.
Inflation is once again at the center of political debate. Dan interviews Tim Barker to put monetary policy in its historical and class war context.
Reading:
Preferred Shares by Tim Barker phenomenalworld.org/analysis/wage-share
email digradiopod@gmail.com for PDFs of the following two articles:
The Vietnam War and the Political Economy of Full Employment by Dean Baker, Robert Pollin and Elizabeth Zahrt
Class Conflict and the "Natural Rate of Unemployment" by Robert Pollin
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