Notes for the individual assignment-literature review The key point is to identify the topic and ideally the specific question you want to investigate. My suggestion is to go through the list of...

Monetary Policy: Historical Analysis and Validation of its Rules
Literature Review
In consideration to present global economic scenarios and co
esponding role of central banks
around world, it seems necessary to revaluate the validity of monetary policies and related
macroeconomic theories. Monetary policy is considered to be the guideline policy and base to
the operational functions, statutory right and obligations of the central banks of all global
economies. In preview of the past and present scenarios of the economic slowdown, financial
crisis and Great recession, a new economic state has evolved which induces revaluation of the
past practices and cu
ently followed monetary policies and central banking regulations.
(Bernanke, 2010) Such status quo compels insiders to rethink about the strategy of altering focus
on monetary policy roles to deals with asset bu
les, resurgence of role of central bank as
anking system supervising authority and find resolutions to deal with issues of zero lower
ound and negligible interest rates. (Palley, 2011)
From the very past insiders are considered to be the supportive of specifically followed
macroeconomic theories and do not expect any change need in the existing monetary policy
approaches. There uncritical approach to same is considered to be influenced by their specific
viewpoint, that Federal Reserve failure is the outcome of ‘unwitting sins of omission’. (Palley,
2011) However, there exist certain degree of conflict between the supporters of specific
approaches, as insider reform program and outsider reform program. Insider reform programs
favors no change approach in the respective macroeconomic theories and the monetary policy
specifications.
Whereas outsider reform program favors to
ing transformational change in the existing
monetary policies and Federal Reserve obligations. Overall outsider’s efforts are intended to
make Federal Reserve more accountable to the appropriate credit allocation and systematic
financial system management, so that comprehensive growth, fair opportunities and full
employment can be developed. As the monetary policy’s influence has certain degree of
co
elation with the economic situations and scenarios, thus appropriateness to strengthen the
economic position and controlling the negative economic effects seems highly valuable aspect.
Historical Overview of Monetary Policy
In order to validate the behavioral relationship of the monetary policy and its specific
need, it seems necessary to extend the line of work and establish venerable economic condition
for the same. From very long time in past, economic principles related to monetary policy
development is considered to be involved in search of single policy variable, like interest rate,
monetary aggregate, to ensure optimal control and stable co
elation with the economic activities
(Lipper, Sims and Zha, 1996) To achieve the same objective certain specific tools are used to
control and establish relationship between monetary policy variables and economic activity
influences, such most prefe
ed tools are open market operations, discounted loans and alteration
of the reserve requirements. (Green, 2011)
The basic monetary policy approach can be considered to be based on utilization of the
specific tools to control the economic situation of inflation, slowdown, recession or depression,
and make the economic situation favorable for comprehensive economic growth. Conclusive
aspects of monetary policy is considered to be inclusive of effective central bank governance,
inducement for open-minded economic philosophy for central banks and significant monetary
policy reforms related to equalization of inflation with minimum unemployment rate of inflation
(MURI) and regulations against excessive leverages, exaggerated incentives and mismatch in
maturity. (Palley, 2011)
From the time of establishment of Federal Reserve and implementation of respective
monetary policy, it has been generally perceived by the economists and researchers that
efficiency of the advanced monetary policy techniques and approaches has mitigated the
influence of business cycle and invariably make is obsolete. Economist and even layman were
agreed to the respective influence of monetary policy, however advent of Great Contraction of
Recession had put question mark on the authenticity and validity of monetary policy techniques
and approaches. In consideration to the post recession scenario strong viewpoint has taken place
in minds of economist and layman that monetary policy tools may be helpful in controlling the
inflationary effects in economic system but severely fails in putting halt on recessionary
situations. (Friedman, 1968)
Specific analysis of the United States economic position or scenario, in the era of 1960s
to 1980s, it is considered...