Economists at our Bank have concluded that differences in state income levels over the past 75 years can be explained mostly by two factors: innovation and education. In simple terms, those states that enhance their knowledge base are the ones that are likely to prosper in the future.

Economists at our Bank have concluded that differences in state income levels over the past 75 years can be explained mostly by two factors: innovation and education. In simple terms, those states that enhance their knowledge base are the ones that are likely to prosper in the future.

Sandra Pianalto, president and chief executive officer of the Federal Reserve Bank of Cleveland, discusses the way the Federal Reserve System ensures that different regions of the country are represented in making monetary policy, describes the way our economy is changing, and suggests some ways...