Public Choice

, Volume 132, Issue 1–2, pp 103–112

The persuasive power of a Committee Chairman: Arthur Burns and the FOMC

  • Henry W. ChappellJr.
  • Rob Roy McGregor
  • Todd Vermilyea
Original Article

Abstract

This paper investigates persuasion as a means of influence for the Federal Reserve Chairman in meetings of the Federal Open Market Committee (FOMC). Using textual records of FOMC meetings, federal funds rate targets have been recorded for Committee members who served in the Arthur Burns era (1970–1978). Results show that Burns-member differences in stated funds rate targets were lower when Burns made recommendations early in the meeting, consistent with the hypothesis that the Chairman is persuasive. Additional results show that members’ tendencies to respond to Burns's recommendations were related to their personal and political loyalties.

Keywords

Federal Open Market Committee FOMC Monetary policy Federal Reserve 

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Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  • Henry W. ChappellJr.
    • 1
  • Rob Roy McGregor
    • 2
  • Todd Vermilyea
    • 3
  1. 1.University of South CarolinaSouth CarolinaUSA
  2. 2.University of North CarolinaCharlotteUSA
  3. 3.Federal Reserve Bank of PhiladelphiaPhiladelphiaUSA

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