All Questions
3 questions
4
votes
1
answer
136
views
How buying bonds indirectly from the government prevents the central bank from financing government deficit?
From Krugman's macroeconomic textbook (highlighting is mine):
"In an open-market operation the Federal Reserve buys or sells some of
the exist- ing stock of U.S. Treasury bills, normally through ...
- 1,135
4
votes
2
answers
4k
views
What effect would raising reserve requirements while printing money have?
It is generally accepted, that printing money will be inflationary, as it increases the money supply without a corresponding real growth of the economy.
At the same time, if the central bank ...
- 2,036
2
votes
2
answers
75
views
Can a government or central bank work to reduce inflation without hiking interest rates and causing the currency to appreciate?
Since trying to lower inflation will have some undesirable consequences, such as currency appreciation, which hurts exports, should governments and central banks keep hands off on inflation?
But ...
- 131