Note: This is post #120 in a weekly video series on basic economics.
Last week we looked at how the U.S. Federal Reserve controlled the supply of money prior to the Great Recession. In response to the 2008 financial crisis, the Fed began to employ some new instruments and approaches to getting the economy back on track. In this video by Marginal Revolution University, economist Tyler Cowen looks at three of these new methods: quantitative easing, paying interest on reserves, and conducting repurchase (and reverse repurchase) agreements.
(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)
Click here to see other videos in the Introduction to Economics series.