Probably no government entity creates more controversy than the Federal Reserve. Some of this is certainly politics. But many of the battles involve deeply held feelings/beliefs on one side of an economic issue or another. The Fed, our central bank, is certainly not a quiet cave for nerds. It can have a dominant influence on economic outcomes. What the Fed decides matters, and no sense of how our country works is complete without some understanding of how it operates. Furthermore, the Fed itself has changed dramatically over the last 15 years.

To help us navigate these changes, we will rely on an excellent book by Ben Bernanke, The Courage to Act: A Memoir of a Crisis and its Aftermath. Bernanke, as head of the Fed, led us through the “Great Recession” that began with the world-wide financial crisis of 2007-2008. The events of those years brought us close to a return to the Great Depression. To avoid this, the Fed developed new tools and techniques that are part of the modern Fed. Let’s look at all of this and try to figure out whether we feel blessed or cursed by the redefined central bank that has emerged.