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Should the Federal Reserve only focus on inflation?

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The role of fiscal policy is stabilizing the economy "Should the FED focus on only inflation"?

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Solution Summary

The following is a discussion of the different policy roles that the Fed plays and how the Fed interacts with fiscal policy makers in trying to steer the economy.

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This has been an ongoing debate in monetary policy. Some argue that it is the FED's job to maintain stable prices and let fiscal policy makers worry about employment and GDP. Over the last 20 years or so the FED has maintained a mission to not only consider the price level (inflation) but also employment and GDP.

One advantage of the FED's monetary toolbox is that the effects tend to emerge much quicker than those of ...

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