Federal Reserve Bank
of San Francisco Federal Reserve Bank
of San Francisco

Dr. Econ

Dr. Econ answers many questions with a focus on monetary policy and Federal Reserve related issues. The Doctor does not do homework, give financial advice or provide research support.

  • Why is M2 above its 1998 range, and what does it mean for monetary policy?

    Because overall economic activity has been robust, demand for M2 has risen. However, due to deregulation and innovation, M2 and the monetary aggregates in general play only a minor role in the formulation of monetary policy.

  • What is behind the currency crisis in East Asia?

    Details some of the factors that led to the East Asian currencycrisis and how some countries tried to fight off attacks ontheir currencies in order to avoid currency depreciation.

  • What is Taylor’s rule?

    One of the few rules referenced in designing and implementing monetary policy, the Taylor Rule provides recommendations for setting real-short term interest rates according to factors such as actual inflation vs. targeted inflation and the level of full employment. In all, it guides policy to help a central bank achieve both its short-run goals for stabilizing the economy and its long-run goals for keeping inflation low.