While reading chapter 10, I was struck by the difficulty involved with trying to control economic growth, or inflation. Wheelan introduces the Federal Reserve and elaborates on what exactly it is that they have to do. He numbers off "what exactly the Fed is charged with doing." He says,
"Bear in mind: (1) We do not know the economy's exact speed limit. (2) Both the accelerator and the brake operate with a lag, meaning that neither works immediately when we press on it...(3) Monetary and fiscal policy affect the economy independently, so while the Fed is gently applying the brake, Congress and the president may be jumping up and down on the accelerator..(4) There is the obstacle course of world events--a financial collapse here, a spike in the price of oil there. Think of the Fed as always driving in unfamiliar terrain with a map that's at least ten years out of date."
This description gave me anxiety just by reading it. Having a job within the Federal Reserve calls for no mistakes and a whole lot of "Im not sure's." If the job is done wrong, the outcomes will affect a large population of people in a really negative way. If the economy is being slowed down, we are wasting the potential it has to grow. If the economy is growing too fast, "workers are scarce; capital is scarce; technological change proceeds at a finite and unpredictable pace." Wheelan concludes that "Economists reckon that the speed limit of American economy is somewhere in the range of 3 percent growth per year...and the phrase 'somewhere in the range' gives you the first inkling of how hard the Fed's job is." Overall this introduction the Federal Reserve's job stuck me as being an extremely tedious, profound, yet crucial career. The job can have significant consequences and was accuratley pointed out as "the economic equivalent of brain surgery."
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