In May 2012, Stockton was commissioned by the Court of the Bank of England to conduct a review of the forecasting capability of the Monetary Policy Committee (MPC). That review encompassed the forecast performance of the MPC, the analyses underlying the forecast, and processes used to produce and communicate the forecast. The review was delivered to the Court in October 2012.
Stockton is the former director of the Division of Research and Statistics at the Board of Governors of the Federal Reserve System. In his position as chief economist, Stockton oversaw the preparation of macroeconomic and financial market analyses and forecasts for the Board of Governors and the Federal Open Market Committee (FOMC) to assist them in decisions related to monetary policy. He began his career at the Board in 1981 as an economist in the wages, prices, and productivity section of the division of research and statistics with responsibility for the forecasting and analysis of inflation. In 1986, he became senior economist in the economic activity section, where he coordinated the staff economic forecast for the FOMC.
In 1987, Stockton was appointed an officer of the Board and became assistant director and chief of the economic activity section. From 1988 to 2000, he was assistant director, associate director, and deputy director of the division of research and statistics before being appointed director in 2000. He represented the Federal Reserve at many international meetings.
Prior to joining the Board staff in 1981, Stockton was an instructor and lecturer at Yale University in New Haven, CT and Trinity College in Hartford, CT. He served on the board of directors of the Securities Investor Protection Corporation (SIPC) from 2000 to 2011. He served as chairman of the Audit and Budget Committee of the corporation. Stockton has published numerous papers in the areas of macroeconomics and labor markets. In addition, he made presentations to various professional organizations, including the American Economic Association, the Econometric Society, the National Bureau of Economic Research, many foreign central banks, private financial institutions, and the general public. He has also been a visiting researcher at Georgetown University. He received his Bachelor of Arts degree and Master of Arts degree (1976) from the University of Connecticut and his Master of Philosophy degree (1978) and Doctor of Philosophy degree (1983) from Yale University.
- The Policy Challenges Ahead: Monetary, Fiscal and Regulatory Policies and their Interaction
The recent financial crisis resulted in unprecedented policy responses from monetary and fiscal policymakers, and has led to widespread changes to the regulatory structure of the financial industry that are still in the process of unfolding. Those changes have left a legacy of historically low interest rates, still-tight credit conditions, massive federal budget deficits and burgeoning federal debt. How will these highly unusual and almost certainly unsustainable circumstances evolve over the next few years? Will the efforts to normalize monetary policy, reduce federal deficits and adjust the regulatory environment be mutually reinforcing and supportive of recovery, or will they be in some conflict with the potential to slow the process of adjustment and repair? How will the process of rebalancing monetary, fiscal and regulatory policies influence the economic environment in which businesses and households operate? Dave Stockton, during his 30 years in the Federal Reserve and his 11 years as its Chief Economist, observed and participated in the policymaking process in the United States. Using the perspectives that he gained from those experiences, he will lay out a variety of scenarios for the courses of monetary, fiscal and regulatory policies and their respective consequences for the course of financial and economic developments both here and abroad.
- The U.S. and Global Economy: Where Do We Go From Here?
Through the financial crisis, former Federal Reserve Chief Economist and top advisor to the Board of Governors, Dave Stockton, has repeatedly been asked two questions about the economic headwinds that have plagued the world for the last few years: 1) What did we know? and 2) When did we know it? But Stockton, well known for understanding the inherent uncertainty of any forecast, believes the questions we should be asking are: “How do we ensure a sound recovery?” and “How do we limit the potential for future international financial crises to destabilize the U.S. and global economy?” These questions are at the core of his compelling presentations. Others pivotal issues he tackles include: Has the Great Recession left a lasting imprint on our behavior as consumers, employers and employees? What are the long-term consequences for individual and family income? When things seem most bleak, how do we restore confidence and take the time needed for effective repair and improvement? Drawing on his unparalleled experience and the analytic acumen that he gained during his 30 years at the Fed, Stockton explores the Fed’s forecasting and decision-making process, the global economic forces that led to the Great Recession and what we can do to reduce the probability of future financial disruptions and to contain their fallout should they occur.
- Forecasting at the Fed: How the Great Recession Is Changing the Way the Central Bank Does Business
As the U.S. economy slowly and painfully rebuilds after the longest contraction since the Great Depression, the vast majority of Americans—from financial leaders to foreclosed homeowners—have been asking what went wrong and how the vast majority of market watchers missed the signs of trouble to come. Was the conventional economic framework embodied in the models commonly employed by central banks and the private sector up to the task? What have we learned about how increasingly complex financial institutions and financial markets interact with each other and with businesses and households to shape global economic developments? In light of recent developments in Europe and Asia, was sufficient attention paid to how foreign economies have the potential to feed back into the performance of the U.S. economy? Were we probing the vulnerabilities posed by model uncertainty? Dave Stockton, who helmed the Federal Reserve’s Division of Research and Statistics from 2000 to 2011, addresses these complex questions and discusses recent structural changes within the Fed—including the creation of a multidisciplinary committee tasked with studying large financial institutions and key markets—as well as how the Fed assesses risk and monitors foreign economies. A 30-year veteran of the Fed who is known for his penetrating analyses, impeccable judgment and winning sense of humor, Stockton illuminates the impact of the recession and its aftermath on the Fed’s internal operations and shares his forecast for future economic policymaking.