Appalachian Figures
A Kentucky start with a global reach
Peter Ault Tinsley was born in Pikeville, Kentucky, on January 21, 1939. He earned a B.A. from Hobart and William Smith in 1961, completed a Ph.D. in economics at Princeton in 1966, and joined the staff of the Federal Reserve Board while finishing his doctorate. After a three decade career in Washington he later taught at the University of Cambridge and at Birkbeck, University of London. He died in 2018.
Building FRB/US
Tinsley’s name is tied to the Federal Reserve’s forward looking macroeconomic model known as FRB/US. The official 1996 guide lists him as a coeditor and describes the model as a replacement for the older MPS system, with behavioral equations that make expectations explicit.
In 1997 a Federal Reserve Bulletin article coauthored by Tinsley explained how expectations are represented inside FRB/US and why that matters for policy analysis. Around the same time a FEDS paper documented how Fed staff models were evolving toward more explicit treatment of expectations and intertemporal decisions. Former Vice Chair Donald Kohn later recalled that under the initiative of Tinsley and others the staff model moved from backward looking to forward looking, which made it more useful for policy work.
Roles inside the Board
A Board directory printed in the 1996 Annual Report lists “Peter A. Tinsley, Deputy Associate Director” in the Division of Research and Statistics, a contemporary record of his senior staff role in the years FRB/US was introduced.
Expectations, credibility, and the yield curve
Beyond model building, Tinsley’s research with Sharon Kozicki reshaped how many economists read the bond market. Their “shifting endpoints” papers argued that the long run anchor for short term rates can drift as the public learns about policy goals, an insight that helps explain movements in the yield curve.
The pair also showed that imperfect policy credibility can lead standard tests to reject the expectations hypothesis even when expectations drive bond yields. An open working paper version is available from the Kansas City Fed. They extended the credibility idea in a Journal of Economic Dynamics and Control article that modeled permanent shifts in the perceived inflation target alongside transitory policy disturbances.
Later work used surveys to recover a term structure of expected U.S. inflation. A Bank of Canada working paper laid out the method, and a Journal of Money, Credit and Banking article documented how survey information can track changes in the perceived inflation target.
Zero lower bound playbook
Years before the 2008 crisis, Tinsley coauthored a study of what monetary policy can do when short term interest rates hit zero. That research, later published in Topics in Macroeconomics, assessed tools that work through expectations, liquidity, and credit channels when the policy rate is at its lower bound.
Markets after hours
Tinsley’s interests ranged beyond macro models. A 1991 Journal of Finance paper with David Neumark and Suzanne Tosini analyzed after hours pricing of U.S. stocks in overseas trading following the 1987 crash, documenting how information in foreign quotes predicted New York reopening prices.
Why this matters in Appalachia
Tinsley grew up far from the marble halls of Washington. His career shows how an Appalachian education and work ethic can travel into high stakes policy rooms. The modeling choices he championed helped the Fed analyze the economy with tools that take the public’s expectations seriously. When policy makers in later decades spoke about anchoring inflation expectations, or when they reached for options at the zero lower bound, they were often using ideas and software frameworks that trace back to the Pikeville native who made expectations central.
Sources and further reading
A Guide to FRB/US: A Macroeconomic Model of the United States (version 1.0, Oct. 1996), Board of Governors. Coedited by Flint Brayton and Peter A. Tinsley. Federal Reserve
Brayton, Mauskopf, Reifschneider, Tinsley, Williams. “The Role of Expectations in the FRB/US Macroeconomic Model,” Federal Reserve Bulletin, April 1997. Federal Reserve
Brayton, Levin, Tryon, Williams. “The Evolution of Macro Models at the Federal Reserve Board,” FEDS 1997-29. Federal Reserve
Levin, Rogers, Tryon. “Evaluating International Economic Policy with the Federal Reserve’s Global Model,” Federal Reserve Bulletin, Oct. 1997. Federal Reserve
Kalchbrenner and Tinsley. “On the Use of Feedback Control in the Design of Aggregate Monetary Policy,” AER Papers and Proceedings, 1976. See AER index and FOMC memo “Optimal Control and the Policymaker” for contemporary context. JSTOR+1
Neumark, Tinsley, Tosini. “After-Hours Stock Prices and Post-Crash Hangovers,” Journal of Finance, 1991. Wiley Online Library
Kozicki and Tinsley. “Shifting Endpoints in the Term Structure of Interest Rates,” Journal of Monetary Economics, 2001. IDEAS/RePEc
Kozicki and Tinsley. “What Do You Expect? Imperfect Policy Credibility and Tests of the Expectations Hypothesis,” working paper version, KC Fed, 2001. Federal Reserve Bank of Kansas City
Kozicki and Tinsley. “Permanent and Transitory Policy Shocks in an Empirical Macro Model with Asymmetric Information,” JEDC, 2005, open via EconStor. EconStor
Kozicki and Tinsley. Survey-Based Estimates of the Term Structure of Expected U.S. Inflation, Bank of Canada Working Paper 2006-46. Government of Canada Publications
Kozicki and Tinsley. Perhaps the FOMC Did What It Said It Did: An Alternative Interpretation of the Great Inflation, Bank of Canada Working Paper 2007-19. Government of Canada Publications
Kozicki and Tinsley. “Effective Use of Survey Information in Estimating the Evolution of Expected Inflation,” JMCB, 2012. Open PDF version. ASC
Clouse, Henderson, Orphanides, Small, Tinsley. “Monetary Policy When the Nominal Short-Term Interest Rate is Zero,” FEDS 2000-51 and Topics in Macroeconomics, 2003. SSRN+1
Board of Governors Annual Report directory, 1996, listing Peter A. Tinsley as Deputy Associate Director, Division of Research and Statistics. Federal Reserve
Federal Reserve Oral Histories that reference the FRB/US transition and Tinsley’s leadership in forward looking modeling. Federal Reserve
Princeton Alumni Weekly memorial for Peter A. Tinsley, Feb. 6, 2019. Princeton Alumni Weekly
Washington Post/Legacy obituary and Dignity Memorial notice. Legacy.com+1
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