Understanding the Basics from a Contemporary Perspective

Abstract

What does the Fed think about how the economy functions and how the institution itself makes, conducts, and discusses its monetary policy? This chapter elucidates the general principles of the Fed’s views. Thus, it affords useful background for the detailed chapters that follow on the Bernanke era, which of course can’t avoid these issues. Federal Reserve personnel and conventional macroeconomists predominately see eye to eye, though both suffer lacunas.