Politics and the Fed

Posted: 8 Apr 2010

See all articles by Allan H. Meltzer

Allan H. Meltzer

Carnegie Mellon University - David A. Tepper School of Business

Date Written: April 8, 2010


In the standard policy model, a policymaker optimizes the welfare of a representative agent. In practice, policies are chosen in a political process by agents elected by voters. Drawing on evidence from my two volume History of the Federal Reserve, the paper reports many examples of decisions influenced by political pressures. The History shows that the meaning of the independence of the Federal Reserve changed over time reflecting political influences.

Keywords: monetary policy, political economy, Federal Reserve

JEL Classification: E50, E52, E58, N12

Suggested Citation

Meltzer, Allan H., Politics and the Fed (April 8, 2010). Available at SSRN: https://ssrn.com/abstract=1586534

Allan H. Meltzer (Contact Author)

Carnegie Mellon University - David A. Tepper School of Business ( email )

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