Monetary Policy: Current Policy and Conditions

Labonte, Marc ; Makinen, Gail E.

Library of Congress. Congressional Research Service.

关键词: Economic policy;    Monetary policy;   

RP-ID  :  RL30354
RP-ID  :  RL30354_2006Aug21

美国|英语

来源: UNT Digital Library

【 摘 要 】

Monetary policy can be defined broadly as any policy relating to the supply of money. Monetary policy can have important effects on aggregate demand and through it on real Gross Domestic Product (GDP), unemployment, real foreign exchange rates, real interest rates, the composition of output, etc., all of which are short-term effects. Over the longer run, the major effect of monetary policy is on the rate of inflation. A growing money supply is important for the subsequent growth in money spending or aggregate demand. The Federal Reserve executes monetary policy by setting a target for an overnight interest rate called the federal funds rate. Changes in the federal funds rates affect primarily short-term interest rates, and through these changes, money spending.