From the course: Economics for Capital Markets

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What is monetary policy?

What is monetary policy?

From the course: Economics for Capital Markets

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What is monetary policy?

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- [Instructor] We briefly touched upon monetary policy in the earlier slide. There are broadly three ways that governments can influence the economic health of the country or region. The first of the three levers that we're going to discuss is fiscal policy. Simply put, fiscal policy is spending and taxes. Those who believe in fiscal policy called Keynesians, after economist John Maynard Keynes, believe the most direct way that governments can impact households and companies is by spending either public funds or increasing or decreasing the tax that the private sector must pay. We've seen evidence of expansionary fiscal policy in the past with varying degrees of success from Roosevelt's New Deal after the Great Depression to Obama's Taxpayer Relief Act of 2012. Most commonly, you'll see fiscal policy implemented by legislation, not by the Central Bank. The next policy we're going to look at is foreign exchange policy. An example of this would be China, which pursued a strategy of a…

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