Economics

CHAPTER21

The Central Banks and Macroeconomic Policy

In This Chapter

• The history of central banking
• Bank runs and financial panics
• Macroeconomics and the lessons of the Great Depression
• The role of the central banks in the economy
• The 2008 financial crisis and the response by central banks

The central bank plays the principal role in the monetary and financial realm of an economy. While private banks had an early part in supporting economies, population growth outstripped the ability of small entities to provide sufficient support. Central banks were established to fill this need in growing economies.

This chapter describes the origins and ...