Teaching the New Tools of Monetary Policy
The way monetary policy is implemented has changed. The Fed moved from a limited reserves regime, where reserves in the banking system are scarce, to an ample reserves regime, where reserves are ample or abundant in 2008. However, those changes have not been reflected in textbooks, teaching materials, or practice.
This webpage is intended to provide educators with articles and guided reading activities they may leverage as they transition to teaching the Fed's monetary policy tools in an ample-reserves framework.
Classroom Resources
AP Macro Lecture Guide: How the Federal Reserve Implements Monetary Policy, Lecture Guide.
How Does the Fed Use Its Monetary Policy Tools to Influence the Economy? Page One Economics, May, 2022.
How Fed Policy Transmits to the Economy, Classroom Activity.
How the Federal Reserve Implements Monetary Policy, Lecture Guide.
The Fed's New Monetary Policy Tools, Online Module.
Timeline: Federal Reserve Monetary Policy, FRASER website.
Monetary Policy, The Economic Lowdown Video Series
Part 1: The Fed and the Dual Mandate
Part 2: Two Important Interest Rates in Monetary Policy Implementation
Part 3: Reservation Rate and Arbitrage
Part 4: The Fed in Action
Articles
Closing the Curriculum Gap by Updating Content Standards and Guidelines for Teaching Monetary Policy, The American Economist, March 2022. By Jane Ihrig and Scott Wolla.
Closing the Monetary Policy Curriculum Gap: A Primer for Educators Making the Transition to Teaching the Fed's Ample-Reserves Framework (2020). FEDS Notes, Board of Governors of the Federal Reserve System. By Jane Ihrig and Scott Wolla.
Fixing the “Curriculum Lag” in Economics: The New Tools the Fed is Using to Influence the Economy (PDF). This article was published in Social Education (March-April 2020). Social Education is the official journal of the National Council for the Social Studies (www.socialstudies.org). By Jane Ihrig and Scott Wolla.
Let’s close the gap: Revising Teaching Materials to Reflect How the Federal Reserve Implements Monetary Policy (2020). Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System. By Jane Ihrig and Scott Wolla.
Let’s close the gap: Updating the Textbook Treatment of Monetary Policy (May 2022). The Journal of Economic Education. By Jane Ihrig and Scott Wolla.
Making Technical Adjustments: The Difference Between “Conducting” and “Implementing” Monetary Policy, Economic Synopses, August 2021. By Jane Ihrig and Scott Wolla.
Teaching Monetary Policy with Ample Reserves (March 2023, open access). Journal of Economics Teaching. By Jane Ihrig and Scott Wolla.
Teaching the Linkage Between Banks and the Fed: R.I.P. Money Multiplier, Page One Economics, September 2021. By Jane Ihrig, Gretchen Weinbach, and Scott Wolla.
The Fed’s New Monetary Policy Tools. Page One Economics®, August, 2020 (revised August 2021). By Jane Ihrig and Scott Wolla.
Blog Posts
Fixing the Textbook Lag with FRED: Monetary Policy in a World of Ample Reserves (Part I), Federal Reserve Bank of St. Louis The FRED Blog, June 10, 2019.
Fixing the Textbook Lag with FRED: Monetary Policy in a World of Ample Reserves (Part II), Federal Reserve Bank of St. Louis The FRED Blog, June 13, 2019.
How Does the Fed Influence Interest Rates Using Its New Tools? Federal Reserve Bank of St. Louis Open Vault blog, August 5, 2020.
Visualizing the Fed’s new monetary policy tools, Federal Reserve Bank of St. Louis The FRED Blog, February 22, 2021.
Webinars, Media, and Recorded Presentations
How the Federal Reserve Implements Monetary Policy, lecture, recorded November, 2021.
Teaching about New Monetary Policy Tools, Timely Topics Podcast Series, August, 2021.
Teaching the New Tools of Monetary Policy, webinar presentation recorded August, 2021.
AP Macro gets a makeover, Planet Money interviews Jane Ihrig and Scott Wolla, August, 2022.
Efforts to modernise economics teaching are gathering steam, The Economist, March 2021.
Economics Textbooks Are Finally Getting a Vital Update, New York Times, Peter Coy, January 17, 2024.