Project1: Covid Pandemic and FED Monetary Policy (3 points, Due on 10/6)
Please read the article, watch the vides, and post your comments in your group. The grading of discussion is based on how the posts by individuals have addressed the discussion questions collectively and correctly.
Read the article of “America’s Money Supply Has Ballooned. What Should We Expect Next?” from Manhattan Institute by Mickey D. Levy on July 7th, 2020 at https://economics21.org/americas-ballooning-money-supply and watch the video by the Fed Chairman, Jerome Powell: https://www.wsj.com/video/the-federal-reserve-unveils-23-trillion-in-new-lending-programs/4D21642A-236A-4696-99A4-18DC7BECC4BA.html
The article provides an interesting discussion on the expected effect on inflation two years ago. Compare the Fed’s aggressive monetary easing at the beginning of the pandemic and the Fed’s quantitative easing following the financial crisis of 2008 and answer the following questions.
a. What is the difference between these two rounds of monetary policies in terms of their impact on money supply in the economy?
b. How did the inflation rates move after the Fed’s quantitative easing following the financial crisis of 2008? And how did the inflation rates move after the Fed’s aggressive monetary easing at the beginning of the pandemic?
