The FOMC and the New Economy, 1993–2001 — Research

The FOMC and the New Economy

In the late 1990s the Federal Reserve faced one puzzle — low inflation at low unemployment — and reached for three structural explanations: faster productivity, a lower NAIRU, and global competition holding prices down. This is a reading of nine years of meeting transcripts that scores how each participant used those three ideas — and what the arguments implied for interest rates.

An experimental Lab project — interpretive and provisional, not a finished paper. Each row was read under a fixed rubric developed and calibrated with feedback and rescoring from Jason Furman. The four channels are not equally firm — the depth of calibration varies by channel; see Methodology.

One puzzle, three structural answers — plus a large cyclical residual. The committee argued about the new economy constantly, but the three ideas were far from equal. Start here, then open any channel in the Explorer.

Every dot is one participant at one meeting. Read each row left to right to follow a person through time. Click any dot for the coding and the verbatim quote.

Colour by

Drag sideways to scroll. Click any dot for the full coding and the verbatim quote.

Who carried each argument. The “money chart” up top shows what the committee’s dovish case actually rested on; below, pick a channel to see who held the most pronounced views.

The essay — the collaborative reading of all three channels, with charts.