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The Monetary Standard

This Review article discusses how the Fed might expand communication about its monetary standard. That is, the understanding of the economy’s structure, which disciplines how the FOMC achieves its objectives for employment and inflation.

Last updated: 02-21-2024

A Simple Evaluation of Two Decades of Inflation Targeting: Lessons for the New Monetary Policy Strategy

Recent research examines how the Fed has performed these past 25 years with its dual mandate of maximum employment and price stability, with implications for the Fed’s new monetary policy strategy.

Last updated: 03-31-2021

Getting Monetary Policy Right in the Classroom

In “Teaching the Linkage Between Banks and the Fed: R.I.P. Money Multiplier,” Jane Ihrig, Gretchen Weinbach, and Scott Wolla provide clear direction on what should be taught about the roles of banks and the Federal Reserve in the financial system and how the two are linked.

Last updated: 09-30-2021

More Unconventional Monetary Policy

What new central banking strategies have been used recently? This article describes how central banks' monetary policies have evolved from 2013 to 2019 to encourage economic activity and maintain stable inflation rates. 

Last updated: 08-12-2021

The Impact of COVID-19 Part I: Financial Markets and Monetary Policy

Measures enacted to combat the COVID-19 pandemic reduced economic activity. The first part of this essay discusses the impact on financial markets and the Federal Reserve's response; Part II focuses on the broader economy and fiscal policy response. 

Last updated: 08-02-2020

Some More Unpleasant Monetarist Arithmetic

How is the 1981 paper "Some Unpleasant Monetarist Arithmetic" still relevant today? This research model builds upon those results and explains how low inflation, low interest rates, and high primary budget deficits can coexist. 

Last updated: 08-12-2021

The Fed's New Monetary Policy Tools

Update your knowledge or your classroom lesson with this essay on the Fed's current monetary policy tools. 

Last updated: 08-04-2020

Ample Bank Reserves

It’s a bit complicated, but if you want to learn at least a little more about how monetary policy works, we’ve got a great 5 pages of instruction for you. Read about the FOMC's FFR, IORR, IOER, and ON RPP, which can influence the general cost of borrowing, consumer and producer decisions, and ultimately employment and inflation.

Last updated: 10-15-2019

Comparing Central Bank Balance Sheets

New research compares the balance sheets of four major central banks: the Fed, the Bank of England, the ECB, and the Bank of Japan.

Last updated: 09-26-2019

Countercyclical Capital Buffers

Countercyclical capital buffers are designed to ensure banks have enough capital on hand by requiring them to hold a percentage of it in a reserve (or buffer) account.

Last updated: 09-27-2019

Adapting the Taylor Rule for the Modern Economy

In a recent two-part Economic Synopses essay, economist Kevin Kliesen examines whether the Fed's recent monetary policy decisions align with the much-touted "Taylor rule" and presents St. Louis Fed President James Bullard's alternative version of the rule for setting the federal funds rate. 

Last updated: 05-17-2019

When the Fed Speaks, What Do the Markets Hear?

A recent Review article examines the history and development of Federal Reserve communication with the public and how that communication affects key financial market variables like the price of Treasury securities. 

Last updated: 05-10-2019

Understanding Bank Relationships and Bank Closures in the Great Depression

A recent working paper uses new data on interbank connections to explore the spread of financial shocks through the banking system during the Great Depression and what role the Fed played.

Last updated: 05-13-2019

Gauging the Evolution of Monetary Policy Communication Before and After the Financial Crisis

Central bank communication has come a long way...

Last updated: 10-31-2018

Three Challenges to Central Bank Orthodoxy

In early 2016, Jim Bullard and Kevin Kliesen presented three challenges facing the FOMC’s approach to ending its accommodative policy strategy, including an overemphasis on labor market improvement, uncertainty around the appropriate real interest rates on government debt, and implications for globalization.  

Last updated: 06-18-2018

Allan Meltzer and the Search for a Nominal Anchor

Jim Bullard examines Allan Meltzer’s career and the search for a nominal inflation anchor for the U.S., with two particular points of focus: the flattening of the Phillips curve and falling short of the 2 percent price level path.

Last updated: 06-18-2018

Inflation Control: Do Central Bankers Have it Right ?

Stephen Williamson argues that neo-Fisherism should be the foundation for conventional inflation control.

Last updated: 06-18-2018

Monetary Policy Regimes and the Real Interest Rate

William Gavin breaks down the four different monetary policy regimes from 1965-2015, which display different outcomes for inflation, interest rates, and real consumption growth. He considers that the Fed was the main cause of the low real interest rate environment following the 2007-08 financial crisis. 

Last updated: 06-18-2018