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Right now, the country has some interesting and conflicting Macroeconomic problems. First, we have low EMPLOYMENT. Many folks don't' want to work at the going
Right now, the country has some interesting and conflicting Macroeconomic problems.
- First, we have low EMPLOYMENT. Many folks don't' want to work at the going wages in many kinds of jobs because of COVID19 and its consequences.
- Second, we have high inflation due to bottleneck on the supply-side of things and high demand for consumer goods (but not so much. Some price spikes are localized and have price declines as well, but some are global like the price of oil.
The Federal reserve is tasked with keeping unemployment low and prices low (and stable). But to create more jobs the FED usually lowers the interest rate. To end high inflation the FED raises the interest rate. What should it do now and how is this coordinated or in opposition to fiscal policy?
So, this has an opinion part about what the Fed SHOULD do, but it also has an analytical aspect with the relationship between the FED and fiscal policy.
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