Scott Sumner on Monetary Rules, Blooming Late, and the Death of Cinema
Conversations with Tyler
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Monetary Policy Dynamics: Fed, Congress, and Crisis Response
This chapter examines the interplay between the Federal Reserve and Congress in shaping monetary policy, particularly during economic crises like the COVID-19 pandemic. It emphasizes the Fed's inclination toward discretion in policy-making to prevent congressional missteps and explores how effective monetary responses can stabilize nominal GDP and mitigate financial instability. Historical examples illustrate the complexity of monetary policy decisions and the potential repercussions of failing to act decisively in times of economic distress.
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