The political and institutional independence of U.S. monetary policy
DOI:
https://doi.org/10.13133/2037-3643/10645Keywords:
U.S. monetary policy, Central bank independence, Federal Reserve, Institutional framework, Political challengesAbstract
The work deals with the institutional arrangements underlying the decision-making process for U.S. monetary policy. The primary focus of analysis is on the central bank’s political and institutional independence and accountability for monetary policy. Specifically, the authors review details of the institutional framework and recent Congressional attempts to change that framework. The overall aim is to provide perspective on the autonomy of U.S. monetary policy by considering, among other things, recent political challenges to the structure of the Federal Reserve.
JEL: E58
References
AIYAGARI, S. R., "Deflating the Case for Zero Inflation", Quarterly Review, FederaI
Reserve Bank of Minneapolis, Summer, 1990.
BLACK, R. P., CORRIGAN, E. G., HOSKINS, W. L., and PARRY, R., in D.S. House of
Represeotatives, Subcommittee 00 Domestic Monetary Policy of the Committee 00
Banking, Finance and Drban Affairs, Hearings on H.I.RES. 409, Patt 2, February 6,
BLANCHARD, OLIVIER J. and FISCHER, STANLEY, Lectures on Macroeconomics, Cambridge,
Mass., The MIT Press, 1989.
BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM, The Federa! Reserve System:
Purposes & Functions, Washington, D.C., December 1984.
Economist) The, "Schools Brief: Paradigm Lost", (November 3,1990), pp. 84-85.
HOLTFRERICH, CARL-LUDWIG, "Relations between Monetaty Authorities and Government
Institutions: The Case of Germany from the 19th Century to the Present" in Centra!
Bankl Independenee in Historica! Perspective, edited by G. Toniolo, Berlin & New
York: Walter de Gruyter, 1988.
HOSKINS, W. L, "Centrai Bank Independence", 1989 Annual Report, Federal Reserve
Bank of Cleveland, March, 1990.
JOINT ECONOMIC COMMITTEE, CONGRESS OF THE UNITED STATES, Hearings on Monetary
Policy and Economie Stability, May 16 and June 5, 1984.
MANKIW, N. GREGORY, "A Quick Refresher Course in Macroeconomics", Journa! o/
Economie Literature, voI. 28 (Decembet, 1990), pp. 1645-1660.
SYLLA, RICHARD, "The Autonomy of Monetary Authorities: The Case of the D.S. Federai
Reserve System" in Centra! Banks' Independence in Historical Perspective, edited by
G. Toniolo, Berlin & New York: Walter de Gruytet, 1988.
U.S. HOUSE OF REPRESENTATIVES, COMMITTEE ON BANKING, FINANCE AND URBAN AFFAIRS,
Stall Report: A RaGia!) Gender) and Background Pro/ile o/ the Directors 01 the Federa!
Reserve Banks and Branches, August 1990.
WOOLLEY, JOHN T., Monetary Politics: The Federai Reserve and the Politics 01 Monetary
Po!icy, Cambridge, Cambridge University Ptess, 1984.
money to inflation and economie activity, it is hard to argue that the
conduct of monetary policy should be immune from congressional
scrutiny whieh is bound to include open debate and challenges to the
Federai Reserve's independence. Even within the current state of
economie knowledge, there may well be a case for tilting the balance
of the Fed's monetary policy mandate towards long-run priee stability.
But, judging from recent discussions on this subject (e.g. the Neal
bili), Congress does not seem inclined to make priee stability the
primary objective of monetary policy at this time.
New York, N.Y.
Banca Nazionale del Lavoro
Downloads
Published
How to Cite
Issue
Section
License
