Active learning ideas
Monetary policy involves managing the money supply and interest rates to achieve price stability. For Ireland, this power rests with the European Central Bank (ECB) in Frankfurt. Students learn how the ECB targets an inflation rate of 2% and the tools it uses, such as the main refinancing rate and quantitative easing.
Activity 01
Students represent different Eurozone countries with varying economic conditions (e.g., high inflation in Germany vs. recession in Greece). They must debate and vote on whether to raise or lower interest rates.
How does the ECB use interest rates to control inflation?
Activity 02
Students calculate the monthly increase in a typical Irish mortgage if the ECB raises rates by 0.5%. They discuss how this change affects a family's disposable income and overall consumer spending in the economy.
What is the impact of monetary policy on Irish mortgage holders?
Activity 03
Four stations cover: Interest Rates, Quantitative Easing, Open Market Operations, and Forward Guidance. Students move in groups to create a 'cheat sheet' explaining how each tool works to control inflation.
How does quantitative easing affect the broader economy?
A few notes on teaching this unit
Watch Out for These Misconceptions
The Central Bank of Ireland sets interest rates for Irish banks.
Since joining the Euro, interest rates are set by the ECB for the entire Eurozone. A timeline activity showing Ireland's transition to the Euro helps students understand this shift in sovereignty.
Inflation is always bad for everyone.
While it hurts savers, moderate inflation can benefit borrowers by reducing the real value of their debt. A peer discussion comparing a 'saver' and a 'borrower' during high inflation helps surface this nuance.
Methods used in this brief
Fiscal Policy and the National Budget
Analysing government revenue, expenditure, and the impact of budget deficits or surpluses on the Irish economy.
8 methodologies
Taxation and Equity
Evaluating the principles of a fair taxation system and the economic impacts of direct versus indirect taxes.
8 methodologies