The Federal Reserve :: Essays Papers

The Federal bear President Clinton appointed Alan Greenspan, a well-known chairman of the Federal Reserve Board, to his fourth term as the chairman of the nations central bank. Alan Greenspan accepted the chance to lead the Federal Reserve Board for a nonher four-year term beginning June of 2000. President Clinton praised Greenspan for starting a New Era, an era with high technologies and productivity to advance. He is judge to push the level of prosperity to a higher stage. Alan Greenspan is known as a man of his profession to realize the power and impact of in the altogether technologies for the 21st century. The Feds job of stabilizing output in the short get off and promoting price stability in the long run is made more than difficut by two main factors the long and variable lags in policy, and the uncertain influences of factors other than monetary policy on the economy. This raised an important question, what problems atomic number 18 caused by other influence s on the economy? Output, employment, and inflation are influenced not only by monetary policy, but also by such(pre token(a)) factors as our governments taxing and spending policies, and the introduction of new technologies etc. As we step into the 21st century, the wide spreads of computer industries and advance technologies pee-pee intensify the productivity. When workers and capitals are more productive, the economy can expand more speedily without creating inflationary pressure. U.S. today has experienced a capability surge brought on by the utilization of computer and hi-tech developments. The issue of monetary policy maker is how much faster productivity is increasing and whether those increase are temporary or permanent. With all these uncertainties, the board has to know how and when Fed.s policies will shanghai the economy? Fed looks at a wide range of indicators of the upcoming course of employment, output and inflation. Indicators induces the measure of money sup ply, unemployment rate, real interest rate, nominal and real GDP growth, etc With so much variation of possibilities, policymakers basically have to rely on their own judgement about the directionality of these indictors. They base on these foreshadowing to formulate strategies to maintain the economy at its vellicate condition. In order to have a desire effect on the economy, the Fed must take into account of the influence of these indication, either scratch them or reinforce them as needed.