Comments on: Helicopter Ben and Monetary Policy: the cartoon version!

By: Jason

Jason — Thu, 14 Aug 2008 21:11:47 +0000

Nice. We need to get Bernanke and Greenspan to make a cartoon version of you. Then the circle of anima-nomics will be complete. And, anima-nomics will finally be a word!

By: Jason Welker

Jason Welker — Fri, 11 Apr 2008 00:45:00 +0000

Dear “antijap”, Your proposed boycott of Japanese goods, I’m afraid, would have the exact opposite effect on the yen’s value that you hope for. If you had ever taken an econ class, you’d know that the value of a country’s currency is determined by the demand for that country’s goods. If Americans boycotted Japanese imports, the value of the yen would plummet, making America’s products more expensive to Japanese consumers. An American boycott of Japanese products would harm American producers and lead to rising unemployment in the US, since Japanese will be less able to purchase our output after the yen falls in value.

I’m afraid “remembering pearl harbor” will do no good for either Japan or the US in today’s global economy.

By: antijap

antijap — Fri, 11 Apr 2008 00:06:47 +0000

Dear Sir,

Remember Pearl Harbor!
Boycott Japanese goods and capitals!
Buy American!
Raise the Yen value!

Very sincerely yours,

By: Dana Y.

Dana Y. — Wed, 19 Mar 2008 15:30:08 +0000

It is fascinating how there are two policies to govern economic stability: that of fiscal policy and the monetary policy. However, I believe monetary policy is more effective as fiscal policies not only require mutual consent but may also come across crowding out effect.

By: jenniferchoi

jenniferchoi — Tue, 18 Mar 2008 22:35:20 +0000

The fed, by changing the monetary policy, will have positive and negative aspects. But as people have said, we need both monetary policy and fiscal policy to achieve economic stability.

By: Jessica

Jessica — Tue, 18 Mar 2008 15:49:43 +0000

Its interesting how everything is connected. I think David has a good point that banks probably wouldn’t want to lend money if people weren’t paying it back. However, I guess they have to lend out at least a certain amount or else the money supply would decrease, which would cause other problems.

By: julie.lin

julie.lin — Tue, 18 Mar 2008 15:26:59 +0000

“I agree that both monetary policy and fiscal policy are needed in a country to achieve economic stability.”

i agree with what mond agrees with.

By: Drew Venkatraman

Drew Venkatraman — Tue, 18 Mar 2008 13:34:05 +0000

The fed, can increase its money supply and hope for the best but i believe now more than ever, Americans are going to be cautious while spending so their ideas might not work. Now new developments have been made and the fed has decided to cut interest rates which i believe will be truly more effective.

By: Mond

Mond — Tue, 18 Mar 2008 12:39:56 +0000

The drawing of the Fed looks like a hobo. I agree that both monetary policy and fiscal policy are needed in a country to achieve economic stability.

By: serenatu

serenatu — Tue, 18 Mar 2008 11:42:07 +0000

Even though monetary policy has its good and bad side, it’s still really effective and efficient on fixing the economic problems. Fiscal policy takes a longer time to really be effective.

By: Annie Sung

Annie Sung — Tue, 18 Mar 2008 07:31:03 +0000

I agree with Charlie that monetary policy may be effective as it’s only directed by one person, but fiscal policy involves other individuals and agencies as well, making it a more collective agreement. Nevertheless, like Emily said, there are good and bad sides to both, and the country needs both.

By: Charlie.Gao

Charlie.Gao — Mon, 17 Mar 2008 15:57:14 +0000

Personally I think monetary policy is better than fiscal policy because fiscal policy requires mutual consent among government officials and need to hold meetings whereas monetary policy is directed by one man who can make changes overnight.

By: kevinyeh

kevinyeh — Mon, 17 Mar 2008 14:36:37 +0000

Well the whole point of the OMOs are that they create money for the economy by placing money in the hands of commercial banks and the public, driving down interest rates AND increasing disposable income. That’s actually two factors of the four possible methods of spending. So OMOs should be pretty effective unless recession is REALLY bad. Also, it’s easier for the short run because bonds are more flexible than say, the reserve ratio or discount rate.

By: MichaelChow

MichaelChow — Mon, 17 Mar 2008 13:47:45 +0000

The Federal Reserve Bank’s essential aspect that sets it aside as being powerful is indeed the Opened Market Operations, this is used when an inflation or recession occurs. I agree with Howard how the public will not be able to pay the money back which leads to a decrease in the value of money. But I also do believe that OMO can eventually help the long run as well as the short run in the sense that it can help fix problems gradually.

By: howard lin

howard lin — Mon, 17 Mar 2008 12:51:48 +0000

Well i guess the failure part of the OMO expansionary monetary policy would be that…since the country is currently experiencing inflation and recession at the same time, the real d income is decreasing, the public will not be able to pay the money back, thus would later on create a decrease in value of money. so this OMO would be a short term solution but create more problems later on?!