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"The Federal Reserve is
a complex organization, and many Americans understand
very little about how it carries out its duties and
impacts their lives, let alone how it is evolving in
the changing environment. Yet, this understanding can
contribute significantly to public well-being and to
the Federal Reserve’s policy goals as well. The
Federal Reserve has been long committed to enhancing
public understanding of its activities, the economy,
and the financial system through a variety of outreach
programs and educational materials."
- Janet Yellen, President, Federal
Reserve Bank of San Francisco. |
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The FOMC and Transparency
This month’s issue of Econ Ed and the Fed highlights
economic research published in a recent edition of the FRBSF
Economic Letter. Policymaking on the FOMC: Transparency and
Continuity summarizes a speech given
by the 12th District’s CEO and
President, Dr. Janet Yellen, at the Bank of Japan on May 31,
2005.
After completing this month’s activities, your students
will understand the following economic concepts: The Federal
Reserve (the Fed), transparency, the Federal Open Market
Committee (FOMC), and monetary policy.
Economic Letter Summary
This Economic Letter addresses the issues of transparency
as it relates to the Federal Reserve System (the Fed) and the
Federal Open Market Committee (FOMC). The author focuses
her discussion on two timely topics facing the FOMC today:
speeding up the release of FOMC meeting minutes and the FOMC’s
discussion regarding the adoption of a long-term inflation
target. Additionally, she provides an insightful review of
the FOMC’s progress toward transparency through the
past decade and details the pros and cons behind a more transparent
monetary policy. The Economic Letter concludes by
stressing that transparency is an important, dynamic issue
that the
FOMC must deal with at every meeting.
Economic
Letters are short essays on current and pertinent
economic topics from the Federal Reserve Bank of San Francisco’s
Economic Research Department. For letters on a variety of other
topics and/or to subscribe, please visit our FRBSF Economic
Letters web page.
Econ Ed and the Fed is a publication of the Federal
Reserve Bank of San Francisco. Reaching approximately
10,000 educators throughout the western U.S., it’s
provided as part of the Fed’s
commitment to economic and financial education.
Views expressed are not necessarily those of the Federal
Reserve Bank of San Francisco or the Federal Reserve
System. Articles may be reprinted or reproduced if
the source is credited. Please send a copy of the reprinted
materials to the editor.
Andrea Davis,
Editor
Contributors to this issue: Gary Zimmerman, Economist,
Yelena Takhtamanova, Economist, Renee Courtois, Research
Analyst, and Jody Hoff, Economic Education and Public
Programs Manager, and Darcy Horak, Economic Education
and Public Programs Specialist.
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