Monetary Policy within the IS-LM Framework, livre ebook

The majority of economists would admit that
money is powerful and that changes in money
will impact the economy. Monetary theory analyzes
and determines how changes in the supply
of money affect the economy.
This book details the collection of policies
that use monetary tools known as monetary
policy. For example, the main monetary authority
of a country is its central bank. In the United
States it is called the Federal Reserve Bank System
(Fed), which is a federation of 12 Federal
Reserve Banks. The Fed is responsible for initiating
printing of money, monitoring the interest
rate, and controlling the supply of money in
the economy. Monetary authorities are shielded
from executive branch interference by serving
14-year terms. This allows them to act without
worrying about political fallout or fear of losing
their jobs. The ability to work and function
independently from political pressure has been
used to claim that the supply of money is exogenous.
Inside this authoritative text, the author
gives real insight to the IS-LM Framework
(Investment Saving-Liquidity Preference Money
Supply) and the effects on our economy.
List of Figures ........................................................................................xi
Acknowledgments .................................................................................xiii
Section I: Background and Fundamental Theories............................ 1
Chapter 1 A Brief History of Monetary Theory...................................3
Chapter 2 Politics and Monetary Policy.............................................13
Chapter 3 Two Blades are Better than One:
The Role of IS-LM............................................................23
Chapter 4 The Role of Velocity in Monetary Policy...........................37
Section II: Monetary Theory and Related Issues............................. 45
Chapter 5 Keynes’ View of Monetary Policy......................................47
Chapter 6 Friedman and Modern Quantity Theory...........................55
Chapter 7 Discretionary Policies.......................................................63
Section III: Schools of Thought in Monetary Theory...................... 71
Chapter 8 Austrian School................................................................73
Chapter 9 Rational Expectations Hypothesis.....................................81
Chapter 10 Inflation Targeting............................................................91
Section IV: The Evidence................................................................ 99
Chapter 11 Empirical Evidence Supporting Monetary Policy............101
Chapter 12 Conclusion.....................................................................113
Glossary .............................................................................................123
Notes .................................................................................................127
References ...........................................................................................133
Index .................................................................................................139