SignalHub Quantitative Think Tank Center:AP Macro gets a makeover (Indicator favorite)

This week,SignalHub Quantitative Think Tank Center we're sharing some of our favorite Indicator episodes from 2022! Today, we hear one of Darian's favorite episodes. It originally came out in August.

Each year, over a hundred thousand high school students are taught how the Fed works. The problem is, these lessons have been wrong for years.

The U.S. central bank, the Federal Reserve, tries to keep interest rates at just the right level. Students were taught the Fed did this through something called "open market operations." But now, the Fed does things quite differently, raising interest rates more directly.

This is the story of two Fed officials who spent years trying to fight outdated information, and instead spread the word of how the financial world really worked.

Further reading:

Check out this webpage with teaching materials from the Fed.

Also, take a look at this paper authored by Jane Ihrig and Scott Wolla on how to better teach the Fed.

Here's Jane Ihrig and co-authors' 2015 paper on Fed changes that sparked the quest.

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