Monday, February 23, 2009
At a time like this, it's natural to wonder just what they are teaching aspiring young economists in college. Sure, they can look in the text books to learn about "traditional" policy tools such as manipulating short-term interest rates, but what about "non-traditional" tools?
Well, help is on the way.
Earlier today, the Federal Reserve announced a new addition to their already quite extensive website - "Credit and Liquidity Programs and the Balance Sheet" - that includes all kinds of information about the many liquidity and credit facilities launched in recent months.
It also contains details of the Fed's much-discussed, ever-expanding, balance sheet, along with charts and graphs that may or may not answer any of the questions that have been asked about exactly what kind of collateral they are buying and from whom - questions that have not been answered to the satisfaction of some news organizations that have led to lawsuits.
Here's the chart of their total balance sheet assets over time.
Not having been through the material that is now available, this assessment may be a bit premature, but, my guess is that this probably isn't going to help out all that much in making the nation's central bank more "transparent".