Is monetary policy an effective way to maintain the healthy of the U.S economic system? There is always a hot debate among economists. Recently, the Federal Reserve Chairman Ben Bernanke emphasis the importance of monetary policy during a conference at the Boston Federal Reserve Bank on October 18th, saying that "the possibility that monetary policy could be used directly to supported financial sustainable goals, at least on margin, should not be ruled out," Matter fact, monetary policy is a tool for the government to adjust the interest rate in order to maintain the stability of the economic system. By conducting either the expansionary monetary policy or contractionary monetary policy, the Fed is able to monitor the interest rate in the market and make an adjustment if they think that the interest rate is at an abnormal level.
Source: http://www.reuters.com/article/2011/10/18/us-usa-fed-bernanke-idUSTRE79H5IR20111018
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