Joseph Searle Tracy

Distinguished Fellow

Education

Ph.D., Economics, University of Chicago, 1984
Bachelor of Arts, Economics, University of Missouri, 1978

Joseph S. Tracy joined Purdue's Daniels School of Business as a Distinguished Fellow in spring 2024. He is a nonresident senior fellow at the American Enterprise Institute (AEI). Previously he was executive vice president and senior advisor to the president at the Federal Reserve Bank of Dallas. He joined the Dallas Fed in September 2017 and retired in August 2022. Prior to joining the Dallas Fed, he was executive vice president and senior advisor to the president at the Federal Reserve Bank of New York. He also served as the Bank’s director of research. He joined the New York Fed in 1996 after appointments in the economics departments at Yale and Columbia universities. Joe is a native of Missouri and holds a BA from the University of Missouri and PhD in economics from the University of Chicago.

Working Papers

Rich, Robert W. and Tracy, Joseph "All Forecasters Are Not the Same: Time-Varying Predictive Ability across Forecast Environments." | Related Website | Download |
Kahn, Matthew and Tracy, Joseph "A Human Capital Theory of Who Escapes the Grasp of the Local Monopsonist." | Download |
Clements, Michael P. and Rich, Robert and Tracy, Joseph "An Investigation into the Uncertainty Revision Process of Professional Forecasters." | Download |

How High Could r* Have Risen?
Learning about the level of the neutral policy rate will be an important task for the Federal Reserve in 2025, says Distinguished Fellow Joe Tracy.
Full story: How High Could r* Have Risen?
Fed faces hefty data, political calendar before next policy meeting
The nine days until Federal Reserve officials sit down to decide what to do next with interest rates features a veritable murderers' row of events to shape their move - everything from key employment and inflation data to a closely fought U.S. presidential election.
The Cadence of Monetary Policy
The Taylor rule can be useful for thinking about the pace of adjustments to the Fed’s policy stance, says Distinguished Fellow Joe Tracy.
Putting it Together: From the Taylor Principle to the Taylor Rule
The Taylor Rule is a good starting point for thinking about where the Fed’s policy rate should be, says our Distinguished Fellow Joe Tracy.
Where is the Natural Rate of Interest?
The Federal Reserve has started on its journey to normalize its policy rate, but the destination of monetary policy is uncertain. There are no ruby slippers that can be clicked to take the Committee home.
The Destination for Monetary Policy
On any journey it is important to know how far you are from your destination, says Daniels School Distinguished Fellow Joe Tracy.
The Unemployment Gap and Monetary Policy
Current monetary policy can be calibrated using just the inflation gap and the Taylor Principle, says Distinguished Fellow Joe Tracy.
Calibrating Monetary Policy for a Dual Mandate
The inflation gap and the unemployment gap together provide measures of how the Fed is doing on its dual mandate, says Joe Tracy.
The Taylor Principle with Inflation Uncertainty
How could the Taylor Principle be modified to incorporate uncertainty over underlying inflation?
Measuring Underlying Inflation
Using improved measures of underlying inflation, we can see that the Fed has been tightening monetary policy.
When is No Change in the Fed’s Policy Rate a Change in Monetary Policy?
The Fed has been tightening monetary policy as underlying inflation has abated, notes Daniels School Distinguished Fellow Joe Tracy.
Will the CPI Inflation Report Instill Confidence?
Investors, markets and the public will comb through today’s Consumer Price Index (CPI) inflation report released by the Bureau of Labor Statistics to see if details in the report shed any light on the future path for interest rates.
How Should the Fed Adjust its Policy Rate? Consider the Taylor Principle
Monetary policy affects the economy through its real policy rate, not its nominal policy rate. The “real” policy rate takes inflation into consideration; the “nominal” policy rate does not consider inflation. How should the Fed adjust its nominal policy rate to changes in underlying inflation?