This course will address and clarify two issues critical to understanding our current economic environment: monetary policy and fiscal policy.

Monetary Policy: “I guess I’m stuck with you,” said President Trump, speaking to Jay Powell, his re- cently appointed Chairman of the Federal Reserve. Why such bitterness so quickly? How could this sober Fed Chairman have gone so sideways with the President who had just appointed him? Welcome to the modern central bank. Here and elsewhere in the developed world, central banks have become key, largely independent actors in economic policy and politics. Monetary policy, once an arcane area of economic control, has become controversial as well as crucially important to all of us. It is thought to be the underpinning of today’s high employment and low interest rates. But it’s tricky. These central banks don’t actually spend money. All they do is print it.

Fiscal Policy: Here the issues are more traditional. Spending is what governments do. But usually they collect in taxes more or less what they spend. Now, trillion dollar deficits are the rage, and the national debt is headed for the moon. What does all this mean, and how long can it go on? We will be ably assisted in these discussions by a recent book, The Only Game in Town, by Mohamed El-Erian.