FERkurver

FERkurver, also known as FER curves, are a type of graphical representation used in the field of finance and economics to illustrate the relationship between the Federal Funds Rate (the interest rate at which depository institutions trade federal funds with one another overnight) and the economy's growth rate. The term "FERkurver" is derived from the German words "Fed" (Federal Reserve), "Erwartung" (expectation), and "Kurve" (curve), reflecting their origin and purpose.

The FERkurver was first introduced by the German economist Hans-Werner Sinn in the 1970s. It is based on the idea that the Federal Reserve can influence the economy's growth rate by adjusting the Federal Funds Rate. The curve typically shows a positive relationship between the Federal Funds Rate and the economy's growth rate, with the growth rate increasing as the Federal Funds Rate rises.

The FERkurver is used by policymakers, economists, and investors to understand the potential impact of changes in monetary policy on the economy. It is also used to forecast future economic growth and to evaluate the effectiveness of monetary policy. However, it is important to note that the FERkurver is a simplistic model and does not account for all the factors that can influence the economy's growth rate.

In recent years, the FERkurver has been used to discuss the potential impact of quantitative easing and other unconventional monetary policy tools on the economy. Despite its limitations, the FERkurver remains a useful tool for understanding the relationship between monetary policy and economic growth.