For release: July 20, 2001
Contact: Charles B. Henderson, (314) 444-8311

Review: A Tribute to Monetary Policymaker Darryl Francis

ST. LOUIS -- A former president and CEO of the Federal Reserve Bank of St. Louis whose leadership earned the St. Louis Fed a reputation as a "maverick" within the Federal Reserve System is honored in the July/August issue of Review, the Reserve Bank's bimonthly publication of economic and business issues.

Darryl R. Francis, who served at the helm of the St. Louis Fed from 1966 to 1976, had a career in banking and economics that spanned almost four decades. His strong advocacy of monetarist theory was a major contribution to monetary policy. During his career, he was often at odds with the Fed's stance on monetary policy, speaking openly at Federal Open Market Committee (FOMC) meetings and frequently dissenting from the majority view. Francis was instrumental in the FOMC's decision to adopt a more strategic operating directive and include monetary aggregates in its operating procedure.

The articles and commentaries on Darryl Francis were presented at the St. Louis Fed's 25th annual Economic Policy Conference, held in October of 2000.

"The important lesson to be learned from Darryl Francis and the period in monetary history over which he served, from the late '60s through the late '70s, is that it is a mistake to ignore money growth when conducting monetary policy," said Daniel L. Thornton, a vice president and economist at the St. Louis Fed.

The articles and authors in the July/August issue of Review are:

· "Darryl Francis: Maverick in the Formulation of Monetary Policy," by Jerry L. Jordan,

president and chief executive officer of the Federal Reserve Bank of Cleveland. (Jordan was an economist in the St. Louis Fed's Research Department when Francis was president of the Reserve Bank.)

· "Money and Monetary Policy: An Essay in Honor of Darryl Francis," by Allan H. Meltzer, the Allan H. Meltzer professor of political economy at Carnegie Mellon University and a visiting scholar at the American Enterprise Institute.

· "Expectations, Open Market Operations, and Changes in the Federal Funds Rate," by John B. Taylor, currently the Under Secretary for International Affairs at the U.S. Department of the Treasury. (When he wrote this article, Taylor was a professor of economics at Stanford University.)

· "Identifying the Liquidity Effect at the Daily Frequency," by Daniel L. Thornton, a vice president and economist at the St. Louis Fed, and the coordinator of the policy conference.

· "Assessing Simple Policy Rules: A View from a Complete Macroeconomic Model," by Eric M. Leeper, a professor of economics at Indiana University, and Tao Zha, a research officer at the Federal Reserve Bank of Atlanta.

· "Measuring Systematic Monetary Policy," by Kevin D. Hoover and Oscar Jorda, professors of economics at the University of California, Davis.

· "Monetary Policy Analysis in Models Without Money," by Bennett T. McCallum, the H.J. Heinz professor of economics at Carnegie Mellon University and a research advisor at the Federal Reserve Bank of Richmond.

· "Monetary Transmission Lags and the Formulation of the Policy Decision on Interest Rates," by Charles A.E. Goodheart, an economist at the Financial Markets Group, London School of Economics.

Providing commentaries are: Athanasios Orphanides, a member of the Research staff at the Board of Governors of the Federal Reserve System; Simon Gilchrist, a professor of economics at Boston University; Kenneth D. West, the Ragnar Frisch professor of economics in the Department of Economics at the University of Wisconsin, Madison; Valerie A. Ramey, a professor of economics at the University of California, San Diego; John V. Leahy, a professor of economics at Boston University; and Laurence H. Meyer, a member of the Board of Governors of the Federal Reserve System.

Subscriptions to Review are free and can be obtained by calling (314) 444-8809.

With branches in Little Rock, Louisville and Memphis, the Federal Reserve Bank of St. Louis serves the Eighth Federal Reserve District, which includes all of Arkansas, eastern Missouri, southern Indiana, southern Illinois, western Kentucky, western Tennessee and northern Mississippi. In addition to serving as a bank for depository institutions and the U.S. government, each Reserve Bank monitors economic conditions in the District, participates in formulating monetary policy, and supervises state-chartered member banks and bank holding companies to foster safety and soundness of the District's banking and financial institutions and to protect the credit rights of consumers.

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