17 eco 202 monetary policy impact operation twist did

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ECO 202Monetary Policy Impact“Operation Twist” did effectively end the recession, and gave a boost to the economy by raising short-term rates. Although, it was not forceful enough to lower long-term rates. A study done on this act showed that it lowered the rates on Treasury bonds by 0.15%. However, there was little to no impact on corporate borrowing costs or mortgage rates. Unfortunately, inflation rose to as high as 13.9% in 1966-67. This caused a major disruption in the housing market. Consumers were not able to afford these outrageous rates. Mr. Martin recognized the inflation coming, and stated he believed it was the deficit, not the Federal Reserve causing the inflation. Also, as you can see in the graph above, interest rates remained low in the early part of the decade and continued to rise towards the end of the 60’s.18
ECO 202ConclusionsWhen the 1960’s started, Eisenhower was in office and the US was growing. Kennedy took office and he had big ideas for our country. He aimed to lower unemployment rates, stimulate the economy, and establish more growth here and abroad. Johnson came into office after Kennedy’s assassination, and his agenda including improving civil rights and winning the Vietnam War. The environment became more important nationwide. The economy was negatively impacted by the steps that were taken to implement these goals. Inflation became a staple due to large amounts of government spending and the restrictions of the monetary system. By the end of the 1960’s, the economy had changed significantly. Our dollar was in dire need of improvement, our nation’s growth was slowing down, and inflation was rising. However, there were some changes that were good in our economy. Electronics and computers were being developed and utilized widespread, women and minorities were becoming an active part of the economy, and the US had taken steps that allowed more access to trade with other countries. Poverty had also been reduced and there was effective legislation protecting the environment and people from unsafe business practices.19
ECO 202“Agree/Disagree”A fiscal policy I agree with is the Kennedy-Johnson tax cuts of 1964. Not only did this lower the unemployment rates, it also boosted revenue, as seen in the chart above. Operation Twist implemented in 1961, also improved the economy and effectively ended the recession. I also agree with this policy. If it were not for these two important legislative actions taken into effect, the economy may not have had the boost it did in this decade. 20
ECO 202References1964, T. K. (n.d.). Retrieved from -theory-through-applications/s16-02-the-kennedy-tax-cut-of-1964.htmlAmadeo, K. (2018). U.S. GDP by Year Compared to Recessions and Events. Retrieved from The Balance : Author, G. (2014). Top Economists Say War Is Bad for the Economy. Retrieved from The Big Picture: Board of Governors of the Federal Reserve System (US), 3.-Y. T., &

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