Charles Plosser was a groundbreaking economist, an outspoken Federal Research official, and a staunch supporter of the independence of the central bank, someone who never hesitated speak out against the reigning policy of the time when he saw officials heading in what he saw as the he wrong direction.
When I first met Charlie I had jumped on a train to interview him when he was president at the Philly Fed — the Federal Reserve Bank of Philiadelphia. This was back in the days when Fed interviews were fewer and farther between than they are now. I was lucky enought to connect with him and even luckier to grow this relationship over the years.
For so many people who studied with him, worked with him, made policy with him, did interviews with him and more, losing Charlie is a big loss indeed. He was not only a brilliant economist and dedicated central banker, he was also a teacher. He was a critic and a supporter of the current Fed policy team, as every good central banker must be if the country is to go down its best policy path.
So I assembled three of his closest colleagues to create a remembrance: Loretta Mester, Jeffrey Lacker, and Mickey Levy.
Dive in and hear what three of his closest collegues, admirers and friends share about what he did, what he said, and why we were all so lucky to have known and worked with him.
Important note: Below you will find an edited recap of our interview with great comments and memories from Loretta, Jeff and Mickey.
You will also find the very last interview I did with Charlie for my Central Bank Central Fed Independence Project just one month ago.
My team and I wrap this up with his obituary as we send our condolences to his wife Janet and their family.
Mester: Research director under Charles- a smooth transition 00:01:55.740
Loretta Mester: So, I was the research director at the Philly Fed under, President Santomero. And then, you know, when you're a research director and there's a new president coming in, there's always sort of trepidation, as you're like, oh, I wonder if he's going to bring his own person in? To run the research department and all… but he didn't. Luckily, we worked, I think, extremely well together. I really enjoyed working with him and learning from him. And you would ask, you know, was he hard to work with, was he easy to work with? I don't… we just kind of meshed really well.
Lacker: A dissertation topic then a colleague 00:04:01.760
Jeff Lacker: Yeah, so I met him in academia. I was a, a newly minted PhD from Wisconsin in the mid-1980s, and I, I had done my, thesis, my dissertation, on essentially exploring a topic that he and, and, Bob King, wrote about, and it was about how they… so… You know, Charlie is known for championing this idea of real business cycle, that, shocks to technology and demand can, you know, drive business cycles, you know, just fine. And, you know, a puzzle for that was why money is so strongly correlated with that. And he had… he and Bob King, put together this little theory that, like, yeah, it was sort of inside money, you know… so I came up to him at the AEA meetings. He's at a massive conference of 10,000 economists, and he was at a session, and after the session, I walked up, and I… I badgered him about something, and I didn't get very far, but I didn't… so I didn't have much contact with him until he came onto the FOMC years later, and at the FOMC, we have assigned seats Richmond sat, like, around the corner from Philly, with Cleveland in between. I… and within the Conference of Presidents, I got to know him really well, you know, working together on stuff, but also on policy. Yeah, so he would pass notes...
Fun at the FOMC 00:06:04.460
Loretta Mester: And then when I… we had some overlap where he was president of Philly and I was president of Cleveland. I sat right next to him. So it was like a small distance, you know, movement. I was like, oh my gosh. That was quite… quite remarkable and quite fun.
Met him at the Shadow 00:07:36.210
Mickey Levy: And, he came on the Shadow in 1991, and I remember before he came on-board. I was hanging out after a meeting once, and Alan Meltzer and Anna Schwartz had a fight over Charlie… whether he was qualified to be on the Shadow Open Market Committee, because he wasn't a monetarist, that he only believed in real business cycles. And so, he came on the committee, and we… he and I worked very closely together, and then after Alan retired and dropped out of the committee in 1998. I basically said, listen, I want this committee to be, chaired by academics. So let's have Charlie and Anna be the two co-chairs, and I'll do all the administrative work. And that's what happened, but… but when Charlie really took over the chair of the shadow, and he said, oh, do you mean we have to write a policy statement? So he and I would end up writing them together and became good friends, and fast forward a number of years.
Philly Fed audition 00:09:01.350
Mickey Levy: When Charlie, … so, Loretta, you probably don't know this… but when Charlie was on the shortlist and being interviewed for the Philly job. I actually briefed him on how to respond to questions, and I was doing Q&As with him. And, and we've just kept up our relationship, and, as you said, published numerous articles together. The last piece we published together was in the Wall Street Journal, less than 3 weeks before he passed away. And so, even after that, he was all hyped up, talking about, you know, all the hits we got when we posted it, and he was just…
Central bank Independence 00:10:43.960
Kathleen Hays: Yeah, and of course, we included him in our, Central Bank Central Fed Independence Project, and Jeff was there as well, and I, too, am very pleased that up to the end, and he was still so passionate, still on top of so many things, I guess I want….
The real business cycle is the real deal 00:11:03.620
Jeff Lacker: Just to interject here, say a word about this real business cycle stuff. I mean, it's going be a part of… the extended… you know, summaries of his life that you see around. But, you know, the things I've seen so far have portrayed it as sort of this, nutty fringe theory. So it's… it's just regular economics applied to stochastic economies, economies with randomness and uncertainty that vary over time, where there's intertemporal substitution. It's just basic economics. You know, at first, in the 80s, it got a lot of ridicule from the Keynesians, but in the 90s, the Keynesians kind of came around and realized, alright, that's… that's the way we need to go. We need to take this model and extend it.
Charlie was always learning and open-minded 00:13:10.330
Loretta Mester: Well, it's very interesting, because at the beginning of the crisis, you know, he realized that he was a very strong macroeconomist, and as Jeff said, real business cycles and other things. He knew that that was an area of finance where he had less knowledge. The Fed… the Philly Fed, so that was great, because, you know, he… what was great working with him is he recognized some places where, hey, I have to learn more about this, or, you know, I want to apply this… What was great about having him as a strong academic is he could sort of push back on some of the things that were not sort of well-founded, in terms of some of the proposals, like, that would have sort of a… maybe an immediate good effect, but then, like, let's think about what is that setting up in terms of…
Always thinking ahead 00:14:27.580
Loretta Mester: perhaps, you know, problems that we would get down the road. And I think one thing that's striking about Charlie is that a lot of the things he pointed out, he had courage, because a lot of the things he pointed out Right? Where, you know, you would set up bad incentives down the road, you know, you're exacerbating too big to fail, you're doing things that are mission creep on the Fed that maybe you're getting out of the lane. All of those things were sort of looked like askance.
From academia to the Fed 00:15:45.370
Kathleen Hays: But I want to ask you guys a question, if I could, because one of the reasons I think… I know that Charlie had his academic career, right? The journal that he was head of, so respected, right? But when he came to the Fed, and when I was there <covering the Fed>, I think…it wasn't so much, obviously, about the real business cycle. I think what was coming more to me, that was a debate, again, between… or if there were two sides. Rules, right? Monetary policy and rules. Rules-based monetary policy, and I think that's one of the things in my mind that I started… that I…considered Shadow Open Market Committee, Charlie Plosser, you know, both of you, I suppose, too. That's why I think of him on the monetary policy side, and I think he had a big impact there.
Always principled 00:16:31.220 --> 00:16:36.709
Jeff Lacker: Yeah, that's, that's true. Charlie took a very, … principled approach to things, and grounded things… he wanted things grounded in Real economic models, as opposed to kind of the modern regime of large balance sheet, quantitative easing, and interest on reserves occurred really in December of 2008. And he championed both behind the scenes, you know, confidentially, and in the FOMC meeting in December, and you can see it in the transcript…Clarity about Federal Reserve governance, because it raised some really sticky internal issues. And he pressed those on… on… on… Bernanke and Bernanke responded, I think, appropriately and in a principled way, and Charlie deserves credit for that. Second thing was this idea of a credit accord, which he pushed. He gave a speech about it early in 2009. I did too.
Systemic and rules-based 00:19:25.140
Mickey Levy: being systematic and rules-based. And let me fast-forward to when, you know, after he left the Fed, and he had rejoined the Shadow Open Market Committee, and About 2 weeks after, Jay Powell, unfolded the 2020, strategic plan, you know, which had all these asymmetries in it, and, and, you know, really overturned the 2012 consensus statement. John Taylor called me and said, would I write a paper on this and present it out at Hoover, and my quick response was, under one condition. If I could write it with Charlie.… which was a brilliant move by me, because this was right in Charlie's wheelhouse. And… and so we wrote a paper entitled, The Murky Future of Monetary Policy, Identify… and… and when Charlie looked at the 2020 strategic plan. One of the big table-pounding ideas he got out of it is it just gives more discretion. to the Fed to do whatever it wants, which is a further step away from any kind of systematic, rules-based policy. And it's only a matter of time before all the… all the flaws of this strategy come to the surface. And of course, they came to the surface quicker than we had thought, and wrote several articles about it. But… to your point, he… you know, he… he really believed that… that the Fed would avoid major policy mistakes and be better grounded if… you know, if it… if they had been following as in the past, they would have avoided major mistakes.
Better policy is systematic and well communicated 00:21:39.750
Loretta Mester: And that'll fed into…. better policy is systematic. His is also important, ,and I think his focus on and> … Well-known interest in communication. How do you communicate when <you> make its policy decisions, if… it's much harder to do that if you're not being systematic,… making systematic policy is important, because then it helps you communicate to the public so that they can form better expectations of policy, and it's not like the Fed's, you know, has to be prescient about what exactly is going to happen in the economy. No, what they have to convey is, if the economy does X, we're going to do Y. That can lead to better outcomes. He was very… the principled approach leads you to have better communications and linking those ideas together. I think was an important contribution that Charlie made. But, you know, going back to the original framework, I mean, that… Jeff, you know, like, that was… I mean, and it came a long time coming, right? Because when Ben was in his confirmation… < Lacker: he danced around this issue of an inflation target. Everyone knew he was an advocate from a book he co-authored in 1999, his big book advocating the inflation targets, and the Fed had had an internal inflation target since 1995, but it was secret. Greenspan made it secret >.
The first framework agreement: the real story unfolds 00:22:53.060
Kathleen Hays: Can I just pause you for a minute? I want you to hold that thought, hold that thought, because I want to remind people who are listening, that to me, probably in 2012, I didn't really think of it as much. However, Ben Bernanke went out of his way. He wanted Charlie Plosser….
Jeff tells the full Backstory 00:23:19.050
Jeff Lacker: Let me intervene here... Let me tell the story. It's like… it's not quite that… it is true he asked him to work on this, but he asked him after…the whole process of developing a statement of the Fed's inflation process died. Bernanke abandoned it. He just let it die in November of 2010. And a lot of us around the table that really wanted the Fed to publicly acknowledge that its implicit inflation target had been 2%, it was going to target 2% were unhappy, and Charlie took the initiative of going to Chair Bernanke and saying, come on, Ben, you know, we can put together, you know… Bernanke said, yeah, okay, yeah, let's… let's…
The framework of the framework 00:24:10.840 --> 00:24:15.220
Jeff Lacker: And he <Charlie> proposed… he proposed to Bernanke, you ask me to do this, right? So he was… he was co-chair of this internal communications… Fed Efficacy Communications Subcommittee with Janet Yellen, or maybe she was chair or something as vice chair. But anyway, they got that… the ball rolling. But the… I mean, the…: the import of that, the critical nature of that. There'd been discussions in the later part of 2000… and 2010, and there were a couple of meetings, and it's in the transcript of wrangling about this. They wanted to do quantitative easing, they were afraid that it would blow out the Fed's credibility, and they wanted to nail down credibility. Bernanke had…<as noted above> danced around this issue of an inflation target. Everyone knew he was an advocate from a book he co-authored in 1999, his big book advocating the inflation targets, and the Fed had had an internal inflation target since 1995, but it was secret. Greenspan made it secret. And so, everyone thought, alright, he's going to come in, this is going be his signature contribution, Bernanke's signature, and he tried, they tried, like, various things, and they couldn't get it over the finish line.
The financial crisis at first derailed Bernanke 00:25:25.990
Loretta Mester: Well, but also, you know, they started, and then, of course, the crisis intervened. So that also delayed it all, and then it started to come back. And as I recall, Jeff, and you can remind me. I think Ben was kind of brilliant in this, in the sense that the idea was, we need to have the consensus statement, which is where the inflation target shows up. broad enough to get real consensus among… So, as I recall, and you correct me, there was Charlie because he was a big champion on the one view of the world, and I think Charlie Evans also played an important role, and I think they were setting that up, and Ben was setting that up to sort of, like, okay, if we can get those guys to agree on something.
The draft group 00:26:10.280
Jeff Lacker: So the group that. wrote the initial draft was, Charlie, Charlie Evans, Narayana Kotcherlakota, and Jim Bullard. And then they circulated that among all the presidents, and got them all to say, yeah, this is great.
Quite an effort 00:26:31.490
Loretta J Mester: And I remember how much effort it was, because, you know, you do consultations, you know, so I sat in on those meetings where we Called a group of, you know, each individual president to see, okay, what paragraph… It was a huge effort. 1, 2, 3, 4?
New framework agreement returns to I’s roots 00:27:09.140 --> 00:27:13.420
Jeff Lacker: just a week or two ago, the Fed released It's…Jeff new, revised 2025, consensus, you know, framework document. And they basically retreated from 2020 to, basically, a wordsmithed version of 2012. Jeff Lacker: With one addition. The major, I think, the major addition to that is if inflation expectations get out of hand, we're going to respond forcefully.
Inflation expectations 00:27:39.260
Jeff Lacker: I mean, that was the thing that was missing from 2012.
What will Charlie be remembered for? 00:28:02.260
Kathleen Hays: What will… what should Charlie be remembered for? What… what… what do you think that is? And what do you think everybody else… what other people should know about him that, he pushed, that he was responsible for, and that's why we are talking about him, that's why we consider him such a great monetary policy maker, such a great economist, and… why, you know, it's sad to see him go… But like I said, that he left his mark… he has left his mark on the world of monetary policy and central banking.
Mickey Levy: Charlie’s legacy 00:28:48.830
Mickey Levy: I think he brought… I think he brought great economics to the policy-making arena. And he used not just rigorous economic analysis. He used common sense when he tied together….
Jeff Lacker Charlie’s legacy 00:29:40.160
Jeff Lacker: I'd agree with that assessment, that well-grounded in economics. you know, more than the average bear on the FOMC, in my opinion. You know, I like to think I share that trait, but he was more personable than I was, and so that's probably why he was more effective than I was.
Charlie was a complete supporter of the Fed 00:30:00.500
Loretta J Mester: I guess I'm going to say the same thing. I think one… he may be misperceived by some. He wasn't a zealot. He wasn't like, this is the way you have to think. He was a person who enjoyed and championed alternative viewpoints. Right? That's what made him very great to work with, because you didn't… I didn't have to go in worried that I have a different view from him. He would listen to my kind of viewpoint… and I think the other thing, especially in these times, that's really important to point out, is he really cared about the institution. Like, he cared about making sure that any actions that were taken were… on behalf of the institution and making sure that the institution's reputation and credibility would be enhanced. over time, you know? He wasn't into just looking at the short run, he was looking into the long run.
Kathleen wrap up- 00:34:57.790
Kathleen Hays: We have had a day for Charlie Plosser. Again, I feel so lucky to have known him, and I feel so lucky. You know, some people in life you get to know more than others, right? And I think it's so true what you said, guys, that he was… he was a nice guy. He was a personable guy, and he was part of his Southern background, right? He was kind, he was… someone that… that was easy to talk with, even though he could be a really tough person to argue with. That's certainly my impression.
So, I want to thank my guest today, Loretta Mester, who's former president of the Federal Reserve Bank of Cleveland. She spent many years prior to that at the Philadelphia Fed, rose to be the director, and then had Charlie Plosser as her interesting and informative boss, when he went to the Philly Fed. Jeff Lacker, former president of the Federal Reserve Bank of Richmond, and as such, someone who was a longtime colleague of Charlie's, going to the FOMC meetings together, you know, passing notes, and doing all kinds of very effective things, I love it so much. And, Mickey Levy. He met Charlie back in 1991, when Charlie joined the Shadow Open Market Committee. And over the years, they have collaborated on many research articles, and in fact, just 2 or 3 weeks ago, a great one that you can find in the Wall Street Journal, and I also want to let everybody know that on Central Bank Central, my substack I have an interview with Charlie from just a few weeks ago as well, on the subject of central bank Independence.
Central Bank Central Fed Independence Project - Part 6: Charles Plosser
Charles Plosser made his mark on the academic world of monetary theory and the practical world of global central banks long before he started making his mark on the Federal Reserve when he became president of the Federal Reserve Bank of Philadelphia in 2006 and then served through 2015. An early adopter and advocate of rules-based monetary policy he pu…
Charles Plosser passed away peacefully on Thursday, August 14th, 2025, at the Warner Community Hospice in Amelia Island, Florida. He was 76 years old.
Born in Birmingham, Alabama, Charles graduated from Indian Springs School and then earned a Bachelor of Engineering degree from Vanderbilt University in 1970. He went on to receive both his M.B.A. (1972) and Ph.D. (1976) from the University of Chicago, launching a distinguished career as a macroeconomist.
Charles was best known for influential work on real business cycles and their implications for economic growth. He began his academic career at Stanford University before joining the faculty at the University of Rochester, where he served as the John M. Olin Distinguished Professor of Economics and Public Policy and for 13 years as Dean of the William E. Simon Graduate School of Business Administration. In addition to these roles, Charles spent 20 years as the co-editor of the Journal of Monetary Economics and was a member of the Shadow Open Market Committee, an independent organization of economists that seeks to improve policy discussions, decision-making and economic performance.
In 2006, Charles was appointed President and Chief Executive Officer of the Federal Reserve Bank of Philadelphia, a position he held until his retirement in 2015. During his tenure, he served as a member of the Federal Open Market Committee where he advocated for systematic monetary policy and greater transparency of Federal Reserve decisions.
Following his position at the Fed, Charles became a Senior Visiting Fellow at the Hoover Institution at Stanford University and rejoined the Shadow Open Market Committee, continuing his research on monetary policy and highlighting the importance of an independent central bank.
Outside of his professional pursuits, Charles enjoyed skiing and tennis – he also had a complicated relationship with golf. He had a deep appreciation for good barbecue and took joy in mastering the techniques behind it. A natural teacher, he loved understanding how things work and sharing that knowledge with others – whether explaining a complex economic concept or fixing something around the house. He and Janet enjoyed traveling together, exploring new places, and attending music and theater performances. A lifelong reader with a curious mind, Charles approached every day as an opportunity to learn something new and inspire those around him.
Charles is survived by his wife of 49 years, Janet, their three children, Matthew, Kevin, and Allison, and seven grandchildren. He was a loving husband, father, grandfather, mentor, and friend to many.
A celebration of Charles’ life will be held at a later date. In lieu of flowers, the family asks that donations be made to Amelia Island Chamber Music Festival or Music in the Mountains (Durango, CO) in his memory.
Find here on my Substack podcast:
Plosser, Levy Urge Return to Pre-Emptive Fed Rate Moves
Central Bank Central Fed Independence Project - Part 6: Charles Plosser
Powell Shows Commitment to 2% Inflation Target, Restoring Fed Credibility: Plosser
Plosser Sees Fed "Treading Water," Waiting for News, Waiting for Data
Plosser Sees "Dangerous Shift" As Fed Moves Focus to Credit, Lending Policy
Plosser: Fed's New Framework Must Be Symmetric, Ready to Handle All Challenges
