Essays on The Success of American Government and the Federal Reserve Been in Running the American Economy Case Study

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The paper "The Success of American Government and the Federal Reserve Been in Running the American Economy " is a great example of a micro and macroeconomic case study.   The government along with the Federal Reserve System plays the most critical role in running the U. S. economy (Koba 2015). The responsibility for monetary policy is assigned to the Federal Reserve by the Congress while retaining the supervision responsibilities to guarantee that the Federal Reserve abides by its statutory directive of maximising employment, stabilising prices, and moderating long-term interest rates (Engen et al.

2015). For these reasons, the two have generally worked together in running the American economy during the last two years. This paper examines the extent to which the American Government and the Federal Reserve have been running the American economy during the last two years. It further describes and evaluates the main macroeconomic policies used by the American Government and the Federal Reserve over the last two years. The success of the American Government and the Federal Reserve been in running the American economy The responsibilities of the Federal Reserve boil down into four key roles: providing emergency liquidity using its lender of last resort functions, formulating and implementing monetary policy, supervising banks and providing payment system services to the government and financial institutions (Koba 2015).

During the last two years, the government’ s oversight over the Federal Reserve has served to make sure that the latter ensures accountability, and transparency, financial reform and financial stability and lastly, monetary policy (Congressional Budget Office 2015). The government has played significant supervisory roles in ensuring there are accountability and transparency at the Federal Reserve.

Such efforts have increased the efficiency of the monetary policy. Since the financial crisis of 2009-2010, and its negative implications like unemployment, which were major concerns of the policymakers' attention, creating an explicit policy framework at the Federal Reserve became problematic. However, the Federal Open Market Committee (FOMC) started its longer-term goals and policy strategies in January 2012. This created a long-term strategy of minimising inflation to 2% and a normal unemployment rate of between 5.2%.

References

Thoma, M 2014, How Fiscal Policy Failed During the Great Recession, viewed 30 Oct 2015,

Hartung, A 2014, Obama Outperforms Reagan On Jobs, Growth And Investing, viewed 30 Oct 2015,

Yellen, J 2014, “What the Federal Reserve Is Doing to Promote a Stronger Job Market," 2014 National Interagency Community Reinvestment Conference, Chicago, Illinois

Hummers, L 2010, "Reflections on Fiscal Policy and Economic Strategy," National Economic Council, viewed 30 Oct 2015,

Congressional Budget Office 2015, Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output in 2014, viewed 30 Oct 2015,

Engen, E, Laubach, T & Reifschneider, D 2015, “The Macroeconomic Effects of the Federal Reserve’s Unconventional Monetary Policies,” Finance and Economic Discussion Series 2015-005. Board of Governors of the Federal Reserve System (U.S.), viewed 30 oct 2015,

Koba, M 2015, "The Federal Reserve: CNBC Explains," CNBC, viewed 30 Oct 2015,

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