One of the three stated functions of the Federal Reserve System is monetary policy, and the Federal Open Market Committee (FOMC) is the monetary policymaking body of the Fed. Through monetary policy, which influences the availability of money and the cost of credit, the Fed plays a major role in keeping inflation in check while promoting economic growth. All of the Reserve Bank presidents attend FOMC meetings at the Board of Governors in Washington, D.C., participate in the discussions, and contribute to the assessment of the economy and policy options.
For the Reserve Bank presidents to contribute effectively to the FOMC process, they depend on their team of Ph.D. research economists to track data that inform them about the performance of the nation's economy. These economists provide current economic analysis and policy advice to Federal Reserve decision makers. They also conduct innovative research on a wide range of economic, financial, and behavioral topics that aims to improve our understanding of the U.S. and global economies and encourage better policy outcomes. Through presentations, publications, and advisory activities, they share their research and expertise with policymakers, fellow economists, and the public at large (watch the video below).
An evolving approach to research
The Atlanta Fed's research department has changed significantly over the past 25 years. The department, under the guidance of executive vice president David Altig since 2007, has been increasingly active in modeling the economy, following inflation trends, and conducting significant research studies and conferences to understand the factors at work in the U.S. economy. Dr. Altig serves as the director of research, which entails running the research department and, most importantly, serving as the chief economic adviser to the Bank's president. Additionally, as early as 2007, Dr. Altig began writing a blog for the Atlanta Fed called macroblog, which has gained major traction and notice among economists throughout the nation and with the general public.
In recent years, the Atlanta Fed's research department has embraced innovative ways of looking at the economy, including development of an ongoing examination of business inflation expectations, an inflation dashboard, and a sticky price consumer price index to help chart inflation. Also, the research department created the jobs calculator, a tool that allows the user to examine the variables involved in the unemployment rate. And the Atlanta Fed's labor market spider chart was developed to allow real-time monitoring of broad labor market developments by comparing current conditions with those in the fourth quarters of 2007 (employment's prerecession peak) and 2009 (the postrecession trough in employment). Tools such as these help the research department's dedicated staff of research economists and analysts tackle the challenges of monitoring and understanding the economy.
Community and Economic Development: Promoting stable communities
Under the auspices of the Atlanta Fed's research division is a unique group of people working to understand the needs of communities and their contributions to the overall economy. At one time during the last 25 years, this group, Community and Economic Development (CED), was part of the bank's supervision and regulation division. CED grew out of the Fed's commitment to the Community Reinvestment Act (CRA) passed by Congress in 1977 and revised as recently as 2005. The CRA encourages depository institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe and sound banking operations.
The CED group's expanded scope and applied research orientation led it to move under the research department. Under research, CED at the Atlanta Fed engages in public programs and outreach in addition to applied research to help promote economic growth and financial stability in communities across the region, especially those in low- and moderate-income areas.