The Political Economy of American Monetary Policy [Paperback]

An analysis of the role of the Federal Reserve in monetary policy making in the United States.This collection examines the institutional framework in which monetary policy is made. The essays consider two questions: How free is the Fed to set monetary policy and to what extent do organizational problems affect the choice of that monetary policy?This collection examines the institutional framework in which monetary policy is made. The essays consider two questions: How free is the Fed to set monetary policy and to what extent do organizational problems affect the choice of that monetary policy?This collection of essays examines the institutional framework in which monetary policy is made. The essays consider two questions: How free is the Fed to set monetary policy and to what extent do organizational problems affect the choice of that monetary policy? Topics covered include the Fed's response to movements on its goals, Congressional and presidential pressures on the Fed, the existence of political business cycles operating through monetary policy, and the extent to which monetary policy may be explained by the Fed's own interests. A final section examines the claim that the Federal Reserve follows countercyclical policy and evaluates its performance as a lender to banks both in normal times and as a lender of last resort.Preface; 1. Introduction Thomas Mayer; 2. Studying the Fed: towards a broader public choice perspective Thomas Willett; 3. The Federal Reserve reaction function: a specification search Salwa Khouri; 4. Corporate profitability as a determinant of restrictive monetary policy: estimates for the post-war United States Gerald Epstein and Juliet Schor; 5. Federal reserve behavior since 1980: a financial market perspective William Melton and V. Vance Roley; 6. The Federal Reserve and its institutional environment: a review Michael Munger and Brian Roberts; 7. The political economy of monetary policy Robert Hetzel; 8. Political monetary cycles Nathanl³#