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An Episodic History of Modern Fed Independence

The Independent Review: A Journal of Political Economy 20(1): 2015: 99-120

29 Pages Posted: 23 Aug 2012 Last revised: 26 Jan 2017

Daniel J. Smith

Sorrell College of Business, Troy University

Peter J. Boettke

George Mason University - Department of Economics

Date Written: December 11, 2014

Abstract

We supplement the existing empirical literature on Fed independence with a contextualized episodic history to corroborate the empirical literature and inform future studies. We examine the postwar Fed to focus on the ability of the Fed to forge a monetary path independent of political influence in modern times. We find that the Fed regularly accommodates debt, succumbs to political pressures, and follows bureaucratic tendencies, compromising the Fed’s operational independence.

Keywords: Federal Reserve, central bank independence, monetary policy

JEL Classification: E50

Suggested Citation

Smith, Daniel J. and Boettke, Peter J., An Episodic History of Modern Fed Independence (December 11, 2014). The Independent Review: A Journal of Political Economy 20(1): 2015: 99-120. Available at SSRN: https://ssrn.com/abstract=2135233 or http://dx.doi.org/10.2139/ssrn.2135233

Daniel J. Smith (Contact Author)

Sorrell College of Business, Troy University ( email )

137 Bibb Graves Hall
Troy, AL 36082
United States

HOME PAGE: http://www.danieljosephsmith.com/

Peter J. Boettke

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

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