Friday, April 11, 2008

A Great Summary of the Policy Innovations by the Fed

Previously I discussed how much of what you learned in your money and banking class is now outdated given the many policy innovations by the Federal Reserve since last summer. Stephen Cecchetti now has a nice summary of these innovations that can be found here (shorter version) or here (longer version). Read these updates and you will be current on the workings of the Federal Reserve.


  1. A cynic could argue that the money & banking text was out of date long before the Fed innovations! I mean, LM curves ? Worthy stories of the Fed as guardian of the public well-being, instead of the captive of special interest groups?
    Wot no SIVs, CDOs, CDS, no "Minsky moments"?
    A re-written money&banking text is going to need a lot of work!

  2. For some of the points you make, I found Lawrence H.White's "The Theory of Monetary Institutions" to be interesting.

  3. David,

    Did you graduate from the University of Georgia?

  4. Anonymous:

    Yes, I graduated from the University of Georgia. Lawrence White moved before I could get him as a Professor. However, I did have George Selgin who shared similar views with him and, among other things, used White's book in one of our classes.