2. 9/6/06 Welcome to Money and Banking!

3. Instructor: Russell P. Chuderewicz A little about myself

4. OUR HOME PAGE http://grizzly.la.psu.edu/~rxc122/ You will need the username and password User Name: ecochud Password: wildflower Let’s Go to the Home Page!

5. Let’s get in touch with the macroeconomy First, a historical perspective

7. Now go to WSJ and look at some current stats

11. The pic that follows is the Fed’s main inflation indicator – discuss why!

13. So when did the fed start raising rates??? Answer: End of June, 2004

15. So are investors looking very closely at this data??

16. Discuss the fed minute article briefly

17. Cruise ship example Draw the cruise ship!

18. Key terms/topics Cruise ship example Fiscal Policy Monetary Policy Recognition Lag Implementation Lag Effectiveness Lag NAIRU Full Employment

19. Key terms/topics Cruise ship example Open Market Operations Potential Growth Rate of Economy Stagflation The FOMC Exogenous Shocks Overheating The new economy Speed Limit of the Economy Traditional model

20. Boiler Example Intermediate Targets and the properties of a “good” intermediate target