This Great Graphic was posted on the FT's Alphaville by Cardiff Garcia, which he picked up from a presentation by Jonathan McCarthy of the NY Fed .back in March. Neither the Fed funds target nor the change of reserves directly impact aggregate demand.
McCarthy identifies six channels by which monetary policy changes can indirectly impact demand: interest rats, exchange rates, wealth effect, balance sheet, bank lending and portfolio balance.
Great Graphic: US Monetary Transmission Mechanism
Reviewed by Marc Chandler
on
June 07, 2013
Rating:
Reviewed by Marc Chandler
on
June 07, 2013
Rating:
