Monetary Policy Signaling from the Administration to the Federal Reserve

Havrilesky, Thomas

doi:10.2307/1992668

Cited by 88 publications

(23 citation statements)

References 14 publications

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“…7. The innovative SAFER index developed by Havrilesky (1988) is such an attempt to measure the Fed's political linkages with Congress and the Executive branch of the government.…”

Section: Resultsmentioning

confidence: 99%

Bureaucracy, altruisme, and monetary policy: A note from a forecasting perspective

Mounts

Sowell

1996

Public Choice

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“…7. The innovative SAFER index developed by Havrilesky (1988) is such an attempt to measure the Fed's political linkages with Congress and the Executive branch of the government.…”

Section: Resultsmentioning

confidence: 99%

Bureaucracy, altruisme, and monetary policy: A note from a forecasting perspective

Mounts

Sowell

1996

Public Choice

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“…One can uncouple Federal Reserve actions from vote maximization during some periods, when the political signals that the Federal Reserve receives are weak and do not significantly affect monetary policy. Havrilesky (1988) presents evidence supporting a lack of external signaling during part of the Reagan administration after it became engrossed in the Iranian arms deal crisis.…”

Section: -153)mentioning

confidence: 97%

Institutional Preservation at the Federal Reserve

Auerbach¹

1991

Contemporary Economic Policy

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This paper explains and presents supporting evidence for the hypothesis that institutional preservation is the central motive for Federal Reserve decision makers' behavior. Welfare maximization can, under certain conditions (i.e., via a vote maximization motive or the direct attribution of socially desirable goals), be a part of the preservation hypothesis, but it is inconsistent with substantial parts of Federal Reserve behavior. This paper presents evidence of this inconsistent behavior that the preservation hypothesis can explain. Such evidence includes opposing better coordination with voters'choices, creating an internally authorized fund that makes foreign loans without congressional authorization, opposing better monetary control procedures, organizing lobbying campaigns to defeat legislation to audit the Federal Reserve and make its meetings open to public scrutiny, failing to take minutes after legislation was enacted, and impairing information dispersal about funding for the Watergate burglars. The paper analyzes, in terms of institutional preservation, the results of recent research on the relationship of central banks' independence from short-run political forces and their anti-inflationary monetary policies. Copyright 1991 Western Economic Association International.

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“…Much of it centers around the use of signaling through the financial media, by an Administration, of its monetary policy desires in order to influence the direction and magnitude of the central bank's management of the macro economy (see Havrilesky, 1987Havrilesky, , 1988Havrilesky, , 1990Havrilesky, , 1995Havrilesky, Sapp, & Schweitzer, 1975). One hypothesis that explains the observed pattern of success by Administrations in this regard is that the Federal Reserve is seeking Administration support in order to resist Congressional threats to its prerogatives.…”

Section: Motivations For Congressional Control Of the Fed: Testing Almentioning

confidence: 99%

“…The main channels of academic research in this area (see Waller, 1992) have included direct signaling of monetary policy desires from the administration and Congress to the Federal Reserve (Havrilesky, 1987(Havrilesky, , 1988(Havrilesky, , 1995, coercion by the administration (Waller, 1991), and central bank appointments (Chappell, Havrilesky, & McGregor, 1993;Havrilesky, 1995;Havrilesky & Gildea, 1991Mixon & Gibson, 2002;Waller, 1992Waller, , 2000. Much of the recent literature indicates that, despite the Fed's independence, pressures from public and private sources have considerable influence on monetary policy (Froyen, Havrilesky, & Waud, 1997;Havrilesky, 1988Havrilesky, , 1990Havrilesky, , 1995. The consensus is that there is some scope for administrations to succeed in attempts to influence Fed decision-making.…”

Section: Introductionmentioning

confidence: 99%