York University Views Over Monetary Policy Over the Last Eighteen Months Questions

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Choose 4 of 6 to answer 

1. Why do you think there has been a shift in how people want monetary and fiscal policy to be conducted?  For example why has modern monetary theory gotten so much traction over the last few years and what is it about neoclassical economics discussed in class that has moved some people to take a hard second look at how monetary policy has been conducted in the past?  Can you envision monetary policy taking a more active role in the economy as stated by such theories as the modern monetary theory?  Why or why not?

2. Discuss how the Yetman and Rowe technique was used to explain whether the central bank was targeting inflation as seen in Dr. Hejazi’s PhD thesis.  Why is this technique useful for monetary policy formulation?  How can the technique show if inflation or output has been targeted or not?

3. Do you think it is possible and advisable for the Bank of Canada to have a dual mandate of targeting inflation and output?  Provide an example of how this could be done and what are some of the challenges of getting us there.  In this regard, do you believe that the central bank should follow rules or discretion?

4. What do you think the views of monetary policy has been over the last 18 months?  Do you think the central banks around the world have done a good job in warding off a great recession?  Is there anything you wished they had done differently?  How has monetary policy become more global in your view?  Do you think there should be more collaboration between central banks?  Has need for this collaboration become more or less pronounced?  Why or why not? 

5. Tell me if you agree with the following:  “Federal Reserve Chair Jerome Powell says the central bank can help assess risks to banks from climate change but that addressing the broader issue is up to private companies and elected officials, underlining that U.S. central bankers are not climate policy makers.”  List support for or against this statement.  How would different schools of thought answer this question?

6.  What are the determinants of the term structure of interest rates?  What does the shape of the term structure tell us about future movements in the economy?  Can we do anything to change the term structure of interest rates?  If so, can we always avert a recession or stop and overheating economy from happening based on the shape of the term structure?

https://www.usnews.com/news/business/articles/2021… This link may helpful for question 5