How Monetary Policy Works

alters the supply of money. The supply of money, in turn, affects interest rates.

Turtle represents tight money policy while the bird represents easy money policy.

Policy lags

Inside policy lags is when it is implemented while outside lags is how long it takes to take effect.


Monetary policy must be carefully timed if it is to help the  macroeconomy.


The bossiness cycle is hard to predict due to random turns in inflation and other things

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