Fed Chat: FOMC Transcripts and the Politics of Monetary Policymaking

32 Pages Posted: 26 Sep 2000

See all articles by Henry W. Chappell

Henry W. Chappell

University of South Carolina - Darla Moore School of Business

Rob Roy McGregor

University of North Carolina (UNC) at Charlotte

Abstract

This paper investigates a variety of issues related to political aspects of monetary policymaking. The approach is anecdotal - it is based on our reading of textual records from meetings of the FOMC during Arthur Burns's years as Chairman of the Federal Reserve Board. These records include "Memoranda of Discussion" for meetings between 1970 and 1976, and verbatim transcripts of meetings held between 1976 and 1978. The latter were obtained from Arthur Burns's personal papers and are the only verbatim transcripts of policy meetings available from any major central bank.

We use the records to investigate sources of political influence on policymakers: pressures from the President, the Congress, and the public. We investigate the timing of elections and the possibility of a "political business cycle" in monetary policy. We evaluate issues related to "credibility" and the "time consistency" problem as an explanation for an inflationary bias. Further, we discuss the role of committee decision-making institutions, information strategies, and inertial forces in shaping the decisions of the Federal Open Market Committee (FOMC).

JEL Classification: E52, E58

Suggested Citation

Chappell, Henry W. and McGregor, Rob Roy, Fed Chat: FOMC Transcripts and the Politics of Monetary Policymaking. Available at SSRN: https://ssrn.com/abstract=235882 or http://dx.doi.org/10.2139/ssrn.235882

Henry W. Chappell (Contact Author)

University of South Carolina - Darla Moore School of Business ( email )

Francis M. Hipp Building
Department of Economics
Columbia, SC 29208
United States
803-777-4940 (Phone)
803-777-6876 (Fax)

Rob Roy McGregor

University of North Carolina (UNC) at Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223-0001
United States
704-547-4121 (Phone)

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