Do the US Federal Reserve System Instruments Still Influence the Global Economy?
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Date
2023
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Esade Ramon Illul
Abstract
The Federal Reserve System (Fed) of the United States is a strong economic
organization that substantially affects economies worldwide. The Federal Reserve
has many tools at its disposal, including monetary policy instruments, such as
interest rate changes and quantitative easing, and regulatory functions, such as
monitoring banks and fostering financial stability. This plays the role of setting the
currency exchange rate in the financial market. However, as the interconnectedness
and complexity of the global economy have increased, doubts have been raised by
economists and policymakers concerning the efficacy of the Fed's tools in tackling
the issues faced by the global economy (Fischer, 2015). In this thesis, the
geo-economic consequences of the Fed's instruments are analyzed, and an
investigation is conducted to determine whether these instruments are still effective
in the present state of the global economy. Through a mixed methods literature
review, which aims to discern and synthesize existing narratives on this topic, this
thesis aims to provide a comprehensive understanding of the Federal Reserve's role
in the global economy and the effectiveness of its instruments by analyzing the
historical context of the Fed's instruments, an evaluation of their impact on the
economies of the United States and the global economy, and an examination of
current economic trends and challenges. This thesis seeks to contribute to ongoing
discussions on the role of the Federal Reserve System through its policies, influence
on the USD, and its effect on international economies.
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Keywords
Federal, Reserve, FED, Economics, Geoeconomics, Geopolitics