Safety-net and Budget through First-best P

Dear President Obama,

One of my students last semester proposed to “End the Fed,” in his Term Project on the financial was disappointed about my disagreement with his prescription, not with the “A” grade he got in the course. His grade reflected the coherence of presentation. He nevertheless challenged that I was my safe central banking research. My response (which he did not challenge) was that he did not policy to “End the Fed” attained in equilibrium, whereas my safe central bank obtained in general equilibrium of an economy. I asked him to develop a more general model than mine to prove whether having a central bank keeps the economy in equilibrium (stability).

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