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Hubbard and O'Brien textbook

monetary policy

The actions the Federal Reserve takes to manage the money supply and interest rates to pursue macroeconomic policy objectives.

federal funds rate

the interest rate banks charge each other for overnight loans

expansionary monetary policy

The Federal Reserve's increasing the money supply and decreasing interest rates to increase real GDP.

contractionary monetary policy

the federal reserve's adjusting the money supply to increase interest rates to reduce inflation

Taylor rule

a rule developed by John Taylor that links the feds target for the federal funds rate to economic variables

inflation targeting

conducting monetary policy so as to commit the central bank to achieving a publicly announced level of inflation

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