Despite the fact that the U.S. economy has been performing very well recently, monetary policymakers have been the targets of some criticism. In the speech reprinted here, which was delivered to a group of bankers in June 1997, St. Louis Federal Reserve President Thomas C. Melzer responds to the critics and outlines some ideas for maintaining sustainable, noninflationary economic growth.
In light of recent research findings, the authors review the 1996 policy posture of the FOMC, the monetary policymaking body of the Federal Reserve System. They find several areas in which the FOMC’s policy positions were consistent with the conclusions of recent research studies, whether or not these studies directly influenced the Committee’s thinking.
The author extends his 1995 and 1996 reports on the distribution of U.S. wealth to present a detailed examination of the demographics of the richest and poorest households. He concludes that concern over the concentration of wealth should be tempered by the apparent fact that “the rich” are a changing group, even over short periods of time.
Inventories are widely believed to serve as a buffer stock against unexpected fluctuations in demand, allowing firms to plan production more efficiently. If so, we would expect production to vary less than sales and inventory to move in the opposite direction to sales.
follow @stlouisfed