Professor holds additional post at Federal Reserve

While many professors pursue academic endeavors outside of the classroom, such ventures usually entail writing articles or conducting laboratory research; Professor John Driscoll’s undertaking, however, is a different, full-time career.

Driscoll, who teaches macroeconomic theory at Hopkins as an adjunct professor, also holds a second post as a full-time employee at the Federal Reserve Board. There, Driscoll works as a Senior Economist in the Banking Analysis group, which is in the Division of Monetary Affairs.

At the Fed, Driscoll conducts research on the Macroeconomic Effects of Bank Lending and on Consumer Credit. He views his work as both impactful and rewarding.

“I think [the Federal Reserve is] one of the best policy institutions in the United States,” Driscoll said. “It has a reputation for being a nonpartisan institution that does very scrupulous and careful policy analysis. Its effect on the macroeconomy — both through monetary policy and regulation — is large, and being able to contribute to that in a small way is very appealing.”

After studying physics and economics at MIT, Driscoll went on to get both a master’s degree and a doctorate in economics from Harvard University. In 1995 upon graduating, Driscoll received an offer to work at the Federal Reserve but decided instead to teach at Brown University.

“Seven years later, when I was thinking about moving to another job, [the Federal Reserve] remembered me and got in touch with me, and so I applied and got in,” Driscoll said.

When Driscoll initially joined the Fed in 2002, he worked in a group that monitored money supply and focused on the federal funds market. Around five years ago, he switched into his current role in the Banking Analysis Group.

On Tuesdays and Thursdays, when Driscoll’s macroeconomic theory class meets, he telecommutes to the Federal Reserve. While he is teaching class, Driscoll takes a break from his job at the Fed.

He explained the struggle that his dual roles entail but cited the sympathetic nature of colleagues as easing such burdens.

“[Working and teaching] is a bit of a challenge,” Driscoll said. “But, on the other hand, the people here have been very helpful and friendly. I’ve known many of them for years, and I’ve been teaching. . .economics for nearly 20 years now, so it gets easier in some ways.”

Driscoll first taught macroeconomic theory at Hopkins in 2004. He found out that the University was looking for a macroeconomics professor from a Federal Reserve colleague who also taught at Hopkins. In addition to this class, Driscoll taught a more policy-based macroeconomics class at the Johns Hopkins School of Advanced International Studies (SAIS) in Washington, D.C. He still serves as an adjunct professor in the International Economics Program at SAIS as well.

“I enjoy teaching,” Driscoll said. “I like being able to tell people about macroeconomics. This is almost a kind of hobby for me, really.”

When he is not at Hopkins, Driscoll’s typical day at the Federal Reserve begins at 8:30 a.m. and ends at 6 p.m., but he often works overtime.

“I mostly work on the intersection of banking and macroeconomics,” Driscoll said. “With another team of people, we help monitor developments in banking markets and see what implications that has for the macroeconomy.”

Some days, Driscoll’s job involves preparing briefs for policy makers, but he also spends time on research. In addition to advising the Federal Reserve Board, economists are expected to work on research projects so they can be better prepared to address challenges that occur. One research project that Driscoll and his colleagues have worked on involves determining how the supply of bank loans changes over time and how that affects the economy.

“This is an old question, [and] we think we have a new angle on it,” Driscoll said.

In another paper called “The Age of Reason,” Driscoll and three colleagues wrote about how consumers’ ages relate to their payments on debt instruments.

“The paper that we’ve had the most success with is a paper that shows that the relatively young and the relatively old pay higher fees and have higher interest rates than people that are middle-aged on a bunch of consumer debt instruments, like mortgages [and] credit cards,” Driscoll said.

Driscoll is currently working on a number of research projects. One such project, which he and a colleague, Francisco Covas, are pursuing, is a theoretical model related to banking.

“We’re looking at the effects of changes in banking regulations on the macroeconomy,” Driscoll said. “There are regulations on the amount of capital a bank has to hold, and there are also, more recently, regulations on. . .the liquidity coverage ratio.”

Along with Mark Carlson, another Fed colleague, Driscoll is also researching the effects that changes in reserve requirements had on the behavior of banks in the 1880s and 1890s. In these decades, the Federal Reserve did not exist, but Carlson and Driscoll are using this historical framework to study how regulations affect banks’ behaviors today.

Driscoll, along with colleague Ruth Judson, is also working on a project revolving around sticky deposit rates.

“Bank deposit rates don’t change very much over time,” Driscoll said. “It takes them a long time to apparently respond to changes in the Fed’s federal funds rate, and so we just measure the amount of time that it takes and we compare that across different kinds of banks. Then, we try to write down a little model explaining it.”

In his free time, Driscoll enjoys reading, classical music and theater and watching baseball. He advises students to take classes whose professors have good reputations and for students who want to study economics on the graduate level to take numerous math classes as undergraduates.