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
Date Written: December 11, 2014
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: Suggested Citation