Adapting, Evolving, Learning
The Federal Reserve is an adapting, evolving, and learning organization. In the Federal Reserve Bank of Cleveland's 2012 Annual Report, we take a close look at how it has changed since its creation 100 years ago. Our essay describes some of the seminal episodes that have influenced the Federal Reserve as we know it today. Times have changed, economic theories have developed, and the Federal Reserve has adapted to meet new demands. In fact, over the course of its 100 years, the Federal Reserve has proved not only a willingness to change, but also an appetite for embracing and initiating change ...
Governments and money
A discussion of the history of attempts to protect the purchasing power of money, which contends that fostering competition among currencies may be the best way to generate economic growth through price stability.
Understanding the persistence of poverty
Millions of U.S. citizens continue to live in poverty within one of the wealthiest and most productive nations in the world. The Federal Reserve Bank of Cleveland's 2006 Annual Report reviews some of the reasons for the persistence of poverty in America and suggests that better education and training may be the best defense against poverty.
Altered states: a perspective on 75 years of state income growth
According to a study featured in the Federal Reserve Bank of Cleveland's 2005 Annual Report, differences in state income levels can be explained largely by two factors: innovation and workforce skills. The study's findings suggest that increasing a region's knowledge base should be a primary component of economic development strategies.
Federal Reserve policy promotes growth
A view of the relationship between monetary policy and the economy, reflecting the belief that maintaining price stability does not require high interest rates and less growth.
Price stability: why we seek it and how best to achieve it
Federal Reserve Bank of Cleveland President Sandra Pianalto explains why price stability is essential for maximum employment and how the adoption of a numerical target for inflation may improve the central bank?s ability to achieve both objectives. Find the essay, along with Frequently Asked Questions about inflation.
The unfolding of the 1983 recovery
An examination of the 1983 economic expansion focusing on the effects of monetary policy and a discussion of the prospects for continued economic growth.
2013 Annual Report Why Inflation Is Very Low, and Why It Matters
One of the Federal Reserve?s mandates is maintaining stable prices. During my more than three decades in the Federal Reserve System, the focus has been primarily on avoiding high and variable inflation, and over most of that period, the Federal Reserve has successfully fulfilled its objective to keep inflation in check. More recently, however, our attention has turned to a less familiar concern?persistently low inflation. While high inflation has well-known costs for economic performance, the problems posed by persistently low inflation can be equally harmful. As its title promises, this ...
Theory ahead of rhetoric: economic policy for a \\"new economy\\"
The most important theoretical developments in economics of the past 20 years undermine the notion that substantial benefits are to be had from policies aimed at smoothing what has come to be known as the ?business cycle.? These fine-tuning policies, moreover, may prove costly if their price is higher, unpredictable inflation. Although policymakers may have conquered the fine-tuning impulse, they have perpetuated the language that accompanies it. That is, the language of monetary policy has failed to keep pace with theory and practice. In a world where expectations matter, the language of ...
The Great Depression and Japan's more recent experience convinced some central bankers that deflation is dangerous. This report, however, argues that deflation is an acceptable economic outcome if it is occasional, small in magnitude, and accompanied by strong productivity growth. They analyze the economic impact of deflation and conclude that while the zero, or very low, nominal interest rates that often accompany deflation can cause problems, many of the problems attributed to deflation are not unique to falling prices per se. Some business people mistakenly fear deflation when the real ...