The Difference Between Fiscal and Monetary Policy

Governments are typically concerned with curbing both unemployment and inflation, and there are two ways they approach this, fiscal policy and monetary policy. These are tools that can be used to speed or slow economic growth. What are they? How do they work? Let's check it out!

Check out "Is This Wi-Fi Organic?", my book on disarming pseudoscience!

[srawberrim]

Thank you so much the 7 minute video is more helpful than the 2 hours lecture 😔💗

[renedekker]

Just to add to the video, the Required Reserve Ratio plays a much bigger role than mentioned here. The $9000 that is lent out will eventually be deposited in the bank again, if somebody does not stuff it in an old mattress. That money can then be used as reserve for a new loan again. Effectively this means that the $10, 000 deposit will allow the bank to lend out $100, 000 in loans. That is, the bank is creating money: the amount of money is circulation is multiplied by 10.

[babarazamsucks]

Perfect for me interested and learning about subjects such as politics and economics where this matters.

[carlos]

Hi Dave. I check out your stuff all the time. I am very entertained by your attacks on pseudoscience. Keep it up.

[Mrbrklyn]

Professor can you do a video on trickle down economics and if it is bad or good? HAPPY HOLIDAYS

[NathanAPLOGAN]

Prof Dave teaching me calculus and economics

[jonwestergren]

Dave you give great tutorials
Could you try to explain to the average person the fractional money reserve system
That was the straw that broke the camel's back when it came to the American revolution Once they took our sovereign money away and forced us to use their money we knew we'd always be in debt the rest of our lives That's how we ended up with Can you deal and getting the United States of America
Original sin slavery still suffer from that sin to this day

[w.randyhoffman]

"For this reason, the Fed yields tremendous power over..."

LOL. You mean "the Fed *wields* tremendous power". The Fed isn't in the habit of yielding power to anybody. ;-)

[gdeveloper]

bro please, on an unrelated note, please debunk the silva method right now, im not seeing many debunking videos on the silva method so please do a thorough debunking 🥺

[digitaal_boog]

I have no idea what any of this means. I am never going to use this information.
I still enjoy it though. Weird.

[vladanlausevic]

Also, politicians in general are trying to reward different voting groups as the middle class

[economicsonline]

You need to heavily edit or update this video as much of your monetary policy info is far out of date. The Federal reserve doesn't really do OMO anymore since 2008. Massive QE at the time really reduced the effects of OMO. Also, the required reserve ratio for banks has been 0% since March 2020. The new tools the Fed uses today are interest on excess reserves (IOER), reverse repurchase agreements, and forward guidance. Much of this is actually done with the goal of affect the demand for money rather than the supply.

Check out the most recent (9th edition) of the Hubbard O'Brien Macroeconomics textbook, as they have a decent explanation of it all.

[spatscannon]

You should not be promoting the false idea that a government operates just like a household.

[DM-zqqy]

Would you PLEASE run for congress? Our deficit spending is unsustainable. Congress doesn’t seem to have a clue (or give a ____) about what causes inflation.