Confronting Monetary Policy Dilemmas: The Legacy of Homer Jones

Abstract

I t is an honor to deliver this first annual lecture in memory of Homer Jones. I first became acquainted with Homer when writing my thesis at the University of Chicago, and I found some of his writings to be particularly useful. When Homer later became Director of Research at the St. Louis Federal Reserve Bank, it was—like many things in life—not particularly momentous in itself, but the implications for monetaiy economics were certainly important. In his priceless style, Harry Johnson described Homer Jones as “...an oasis in the desert that Keynesian economics and concern with credit had made of the Federal Reserve System, [and] the last outpost of classical monetary civilization in a cancerous culture of barbarian bumptiousness.” Only an academic, of course, could say something like that—and about an era that fortunately has long passed at the Federal Reserve. Homer Jones should be remembered for many things, not the least of which is the many people whose intellectual development he shaped and whose professional lives he fostered. He was one of Milton Friedman’s first teachers—not in economics, but in insurance and statistics. Milton credits him for providing the inspiration that sparked his initial interest in economics, as well as something more tangible—getting him a scholarship to attend the University of Chicago. And, of course, Homer had a strong influence on the professional lives of the many economists who worked for him in his years at the St. Louis Fed. Homer had an intense respect for the market system; that permeated both his economic analysis and his views about economic policy. His basic policy prescriptions in macroeconomics This article first appeared in the March 1987 issue of Review. Federal Reserve Bank of St. Louis Review, November/December 2013, 95(6), pp. 455-60.