Curriculum Econ 101, Part 5: Money, Banking & the Fed
Econ 101, Part 5: Money, Banking & the Fed
How money, banks, and central banks actually work together - from what gives a dollar its value to how the Federal Reserve steers the whole economy.
- What Money Actually Is Money isn't backed by gold anymore - it works because enough people agree it does. 📄 Read-aloud
- How Banks Create Money Banks don't just store money - through lending, they actually create most of it. 📄 Read-aloud
- The Federal Reserve: What It Does An introduction to the United States' central bank, its dual mandate, and its role as lender of last resort. 📄 Read-aloud
- Interest Rates and the Cost of Borrowing Why interest rates are essentially the price of money, and how one benchmark rate ripples through mortgages, credit cards, and business loans. 📄 Read-aloud
- Monetary Policy Tools The main tools central banks use to adjust the money supply and interest rates, from bond purchases to reserve requirements. 📄 Read-aloud
- Fiscal Policy vs. Monetary Policy The core distinction between government taxing and spending decisions and central bank control over money and interest rates. 📄 Read-aloud
- The Money Supply: M1, M2, and Beyond How economists measure the amount of money in an economy, and why the M1 and M2 distinction matters for reading the news. 📄 Read-aloud
- Quantitative Easing, Explained Simply What quantitative easing is, why central banks turn to it when normal rate cuts run out of room, and the debates over its long-run effects. 📄 Read-aloud
- Central Bank Independence Why central banks are usually insulated from day-to-day politics, and the genuine tension that insulation creates with democratic accountability. 📄 Read-aloud
- Why Deflation Can Be Worse Than Inflation Why falling prices sound appealing but can trigger a damaging spiral of delayed spending, stuck wages, and rising real debt burdens. 📄 Read-aloud
- The Taylor Rule in Plain Words The Taylor rule is a simple guideline suggesting how a central bank's interest rate should respond to inflation and the output gap. 📄 Read-aloud
- Inflation Targeting Many central banks publicly commit to a specific inflation rate, using that target to guide their decisions and anchor people's expectations. 📄 Read-aloud
- Bank Reserves and Capital Requirements How rules on bank capital and reserves protect depositors and the financial system, including the international Basel standards. 📄 Read-aloud
- The Lender of Last Resort Why central banks lend to banks in a panic, the rule set out by Walter Bagehot, and the risks of rescuing banks. 📄 Read-aloud
- Forward Guidance: Steering With Words How central banks influence the economy by signalling their future policy plans, and why credibility makes words powerful. 📄 Read-aloud
- Payment Systems: How Money Moves Between Banks What happens behind the scenes when money moves from one bank to another, including settlement systems like RTGS and NEFT. 📄 Read-aloud
- The Interest Rate Corridor: How the RBI Steers Overnight Rates How the RBI uses the repo rate, the standing deposit facility and the marginal standing facility to keep short-term interest rates close to its policy rate. 📄 Read-aloud