JoeTube27 (December 31, 1969 at 11:59 pm)

In a recession the fed increases money supply which is eventually leads to inflation. More money chasing few goods. Unemployment is up so no one is buying goods. America does not practice free markets. End the Fed. Central banking is part of the Communist Manifesto, along with the income tax. All unconstitutional. Full Reserve banking would work, under certain conditions, that would benefit the person saving and the banks.

qriusgeorge (December 31, 1969 at 11:59 pm)

you guys are all wrong. the issue is within the multiplier effect. just like the DJIA and the FDIC, it just doesn't reflect/qualify accurately enough.

sabdow (December 31, 1969 at 11:59 pm)

I'm a university student and you could have showed ALL of those changes in two simple graphs. Maybe it's the way Americans teach economics but wow, I can see why if half your class fails.The change in interest rate/investment graph was useless by the way. And why do Americans use these terms "Holy Grail 6, Holy Grail 12" etc. Give your students some piece of mind and use classical names please. (The Financial Market Graph, The Goods Market Graph, the AS-AD Graph)

TomSka (December 31, 1969 at 11:59 pm)

Bryn Jones does it better

Shorackoff (December 31, 1969 at 11:59 pm)

One question on the practical level. (so not on the content)Why plotting money supply on the horizontal axis?Wouldn't the IS-LM model have been a better pick?Just asking, want to know if there is a particular reason or not. ;)

ComradeSephiroth (December 31, 1969 at 11:59 pm)

The goal of macroeconomics is to dampen the business cycle, not to increase growth. Fiscal and monetary policy are used to fight recession and inflation. If you want to increase the natural growth rate, you need to expand technology and research at a faster rate.

greenbean1984 (December 31, 1969 at 11:59 pm)

your both dicks.do you really think creating money creates wealth? any increase in money supply is a dilution of the value of the existing money. many investments made due to the increase will be malinvestments and will eventually be corrected by the market, eg in a recession.if we had sound money, there would be no business cycle. the economy would be stable.

inziderhh (December 31, 1969 at 11:59 pm)

Well, you really dont know much about the economy. If the economy is below full-employment level (assume closed economy), then an increase in money supply CAN lead to a rise in consumption and investments. In an open economy with fixed exchange rate, monetary policy is ineffective.This video only teaches some basics, thats totally ok. If you want to talk about all the negative effects of monetary policy then u should write a book or make a 5-6 hours video.

lingojac (December 31, 1969 at 11:59 pm)

Businesses are run by people. If the fed were to sell more securities to people, that results in higher business investments in capital, which means more output, C rises in the AD formula, boom we're back to expansion. This is just an argument of keynesian vs supply-side so there's no really right side. I just thought i'd say that before you gave another shot at trying to prove you're right.'good luck with that brain of yours' well i would have thought i was talking to an adult.dickwad

greenbean1984 (December 31, 1969 at 11:59 pm)

sure an increase in aggregate demand fights recession but the fed try and force it, they pump money into the economy so people spend more. but all they are really doing is adding water to soup, they are diluting the value of each dollar. so everyone is poorer (which eventually causes a recession). and they know thier money is getting worth less so they go out and spend it/invest it. most will be malinvestments which will eventually have to correct themselvesgood luck with that brain of yours