ECON 161A Lecture Notes - Lecture 10: Money Supply, Fedwire, Janet Yellen
Document Summary
To put the federal reserve (the current central bank) in context, it"s an old institution but not the only central bank, it"s the third. There"s always been debates on whether we should have a central bank since the declaration has been signed. 1791 1811: first bank of the united states (first central bank) Each bank issued different bank notes (people in ny used different money than south. 20 year charter (a 20 year life span) Given a large capitalization of million (shares that were sold to private individualized and foreign residents; a private institution) Purpose: provide credit to government, to make loans for private economic development, facilitate tax collection (receive tax revenues of the federal gov. ), and establish a standardized paper currency by gold/silver. Us had bad infrastructure in the beginning so a central bank is a big institution that could make loans on a scale for building these projects.
