The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
THE ROLE OF CENTRAL BANKING ty Karl R. Bopp, Vice President Federal Reserve Bank of Philadelphia before SUMMER WORKSHOP School district of Philadelphia at the Federal Reserve Bank of Philadelphia July 30, 1952 (Brief - barest outlines) Basic economic problem Who is going to produce how much of what for whom? Basic approaches to a solution a. Centralized Government plans and determines, and orders (In inflation, how to limit demand to supply ) (Prejudiced view but based on kind of world I would like for my children) b. Decentralized Individual freedom of choice Centralized control system. a. Method Government establishes prices, wages Rations (ultimately involves labor direction) b. difficulties (illustrate in inflation) Control of essentials makes their production less profitable Especially beyond necessities (wide variety) for existence "Points" system - or barter - part way back to a market system Punch cartoon "Of course the reason we have so much sugar is because neither of us takes any." Vhat about new products, new companies Expensive to administer - U. 2 - Decentralized market a. Method Some way in which individuals can make their wishes known Is it chaos? Money - price - overcome scarcities b. Difficulties (1) Allegation that "rationing by the purse" is unethical No one supports absolute egalitarianism Income/inheritance taxes Effects on incentives (2) 5, The need for a stable money (Overall limit on demand) Why have we not had it Governments needs The Role of Central Banking and the interest rate availability of credit Rigors of the market place Full employment Stable prices
@FedFRASER