[One reform] would be to take away the regional bank presidents’ rotating seats on the Open Market Committee, cutting them out of any role in making monetary policy. This would limit them to conducting the business of regional banking services and economic research, leaving monetary policy in the hands of the Board of Governors, with the aim of removing FOMC from under the thumb of the structural interests of the banking industry.
[Alternatively,] Class A and Class B board members could be selected by the governors of the states within a bank’s jurisdiction. Or instead of governors, responsibility could be vested with senators or state legislatures.
Central banks and monetary policy are the primary determinant of short-term economic conditions—of the unemployment rate, and thus of workers’ ability to bargain for wages.
the vast majority of recessions are fought primarily with monetary tools rather than fiscal ones.
It may seem “obvious” that the decline in housing activity caused the current recession, in line with the Austrian view, but in fact fixed residential investment turned negative in 2006. It stayed negative for more than a year before the recession began, and then continued negative for a couple more quarters before it turned severe. People spent less on home-building and renovation and more on other things. If investment spending in general declines, you would expect spending on consumer goods to rise to offset it. In practice, this doesn’t always happen and you get a recession. It’s this anomalous collapse in overall spending that needs explaining, and describing some of the past spending as “malinvestment” doesn’t help you understand it.
The market determines these things, and a central bank's "meddling" can only dampen the effects of what all the people in the economy are trying to do. No amount of low interest rates can force people to build factories when they don't see a demand for the product.
It sounds like you are saying that printing extra money will not spur investment.
This "Keynesian" modelspace - is that the actual active model?
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