Financial Deregulation, Monetary Policy, and Central Banking

20 Pages Posted: 30 Oct 2012

See all articles by Marvin Goodfriend

Marvin Goodfriend

Carnegie Mellon University - David A. Tepper School of Business; National Bureau of Economic Research (NBER)

Robert G. King

Boston University - Department of Economics; Federal Reserve Bank of Richmond - Research Department; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: April 1, 1988

Abstract

Financial deregulation is widely understood to have important economic benefits for microeconomic reasons. Since Adam Smith, economists have provided arguments and evidence that unfettered private markets yield outcomes that are superior to public sector alternatives. But financial regulations - specific rules and overall structures - are sometimes justified on macroeconomic grounds. This paper analyzes the need for financial regulations in the implementation of central bank policy. Dividing the actions of the Federal Reserve into monetary and banking policy, we find that financial regulations cannot readily be rationalized on the basis of macroeconomic benefits.

Suggested Citation

Goodfriend, Marvin and King, Robert G., Financial Deregulation, Monetary Policy, and Central Banking (April 1, 1988). Federal Reserve Bank of Richmond Working Paper No. 88-1. Available at SSRN: https://ssrn.com/abstract=2120879 or http://dx.doi.org/10.2139/ssrn.2120879

Marvin Goodfriend

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

5000 Forbes Avenue
Pittsburgh, PA 15213-3890
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert G. King (Contact Author)

Boston University - Department of Economics ( email )

270 Bay State Road
Boston, MA 02215
United States
617-353-5941 (Phone)

Federal Reserve Bank of Richmond - Research Department

P.O. Box 27622
Richmond, VA 23261
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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