SF Fed Newsletter

Learn more about what’s happening in the Twelfth District

Economic Letter

Does Monetary Policy Have Long-Run Effects?

Monetary policy is often regarded as having only temporary effects on the economy. However, it is possible for monetary policy to affect an economy’s long-run trajectory. Analyzing data for a set of large national economies since 1900 suggests that tight monetary policy can reduce potential output even after a decade. By contrast, loose monetary policy does not appear to raise long-run potential.

The SF Fed’s Commitment to Equity

The San Francisco Fed is dedicated to building an economy that works for everyone and helping ensure all Americans—regardless of gender, race or ethnicity, geography, ability, or socio-economic status—have the opportunity to fully realize their potential.