Monetary and Fiscal Policy

Lessons

Mechanics of Monetary and Fiscal Policy

What is Money?

How is Money Created?

Official Measures of Money: M1 and M2

Demand and Supply of Money

Fisher Effect

What do Central Banks do?

Tools for Implementing Monetary Policy

Features of Effective Central Banks

The Monetary Policy Transmission Mechanism

Expansionary vs. Contractionary Monetary Policy

Limitations of Monetary Policy

Role of Fiscal Policy

Tools of Fiscal Policy

Fiscal Multiplier and Balanced Budget Multiplier

Ricardian Equivalence

Should We Worry About the Size of Fiscal Deficit?

Challenges in Implementing Fiscal Policy

Expansionary Vs. Contractionary Fiscal Policy

Combined Effects of Monetary and Fiscal Policy