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How to Promote Fed Independence: Perspectives from Political Economy and History

How to Promote Fed Independence: Perspectives from Political Economy and History In two short histories of the independence of the U.S. Federal Reserve Bank since its creation in 1913—the first with respect to the Fed's monetary policymaking, the second focused on its regulatory policymaking—the author shows that the range of the Fed's powers has varied greatly over time, and that changes in those powers have had major effects on the extent of Fed independence. Moreover, the shifts over time in Fed powers reflect, to a significant degree, conscious trade‐offs by Fed leaders. A large number of somewhat surprising Fed positions on important regulatory matters can be explained as more or less deliberate attempts to preserve the Fed's monetary powers from political interference by yielding some of its independence in exercising its regulatory authority. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Corporate Finance Wiley

How to Promote Fed Independence: Perspectives from Political Economy and History

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References (54)

Publisher
Wiley
Copyright
Copyright © 2019 Cantillon and Mann
ISSN
1078-1196
eISSN
1745-6622
DOI
10.1111/jacf.12373
Publisher site
See Article on Publisher Site

Abstract

In two short histories of the independence of the U.S. Federal Reserve Bank since its creation in 1913—the first with respect to the Fed's monetary policymaking, the second focused on its regulatory policymaking—the author shows that the range of the Fed's powers has varied greatly over time, and that changes in those powers have had major effects on the extent of Fed independence. Moreover, the shifts over time in Fed powers reflect, to a significant degree, conscious trade‐offs by Fed leaders. A large number of somewhat surprising Fed positions on important regulatory matters can be explained as more or less deliberate attempts to preserve the Fed's monetary powers from political interference by yielding some of its independence in exercising its regulatory authority.

Journal

Journal of Applied Corporate FinanceWiley

Published: Dec 1, 2019

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