Fed

Anatomy of the Fed

IS_EH_AF — with Robert P. Murphy

Cost: $69   Length: 8 Lectures
Format: Independent Study
Status: Open for enrollment

About the Course

This course covers both the theory and history behind the Federal Reserve, the central bank of the United States. Instructor Robert Murphy details the theory of free-market banking, and contrasts it with the distorted banking sector resulting from special government privileges. Murphy relays the sordid tale of how the Federal Reserve Act was designed on Jekyll Island in a secret meeting of government officials and international bankers. He also covers the mechanics of modern Fed operations and the commercial banking sector. The course also applies Austrian business cycle theory to the stock market crash of 1929 and the recent housing bubble.

The goal of the class is to provide a solid introduction to both the theory of free-market versus cartelized central banking and the day-to-day mechanics of the Federal Reserve in action.

After explaining how money and banking would develop in a free-market economy, Professor Murphy explains central banking from a theoretical perspective. Specifically, the course examines how central banking — that is, a government-sponsored cartel of banks with one privileged bank sitting atop the pyramid — serves to circumvent the market’s natural checks on credit expansion. In addition to increasing the money supply and prices, central banking also fosters the boom-bust cycle.

After reviewing the theory of free versus central banking, the course explores the historical origins of the Federal Reserve. Students will learn the institutional structure of the Fed and learn how to read its balance sheet in real time. Professor Murphy walks through conventional and unconventional Fed operations, studying not just the theory but also the implementation. (For example, exactly how does the Fed go about buying an extra $600 billion in Treasury securities? Are the cuddly bears being paranoid or not?)

Finally, the course wraps up by connecting the operations of the Fed — and its predecessors — with financial crises from US history. These will include the Fed-induced crises of the Great Depression and the housing bubble, but also earlier panics attributable (at least partially) to the swings in credit engineered by earlier incarnations of the US central bank.

Readings

All other readings for this course are free, available online, and provided to students in a fully-hyperlinked syllabus.

Independent Study

Independent study courses are courses that were presented live in the past. These courses are now offered at a discount to anyone who wants to study independently. All courses include lecture recordings, slides, a complete hyper-linked syllabus, automatically-graded quizzes, and a discussion forum. Professors are not available for academic support for these independent study courses.

Sample Certificate of Participation

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