Abstract
Previous chapters have developed evidence of systematic Administration and Congressional influence on Federal Reserve monetary policy. Next we turn to the matter of private interest group pressures on monetary policy. Three significant questions need to be answered. First, do private interest groups attempt to influence Federal Reserve policymaking systematically over time? The impact of fiscal and other shocks on interest rates, exchange rates, and output may be so variable over time (for example, because of changes in the tax and financial regulatory structures) and the political clout of certain interest groups may be so variable over time (for example, because of demographic changes) as to militate against persistent pressures from specific private groups. Second, if systematic attempts are made to influence monetary policy, what are the channels of communication? Do private interest groups try to affect monetary policy directly through formal institutions within the Federal Reserve System, such as the Bank directorates where they are represented (Havrilesky 1986); the Federal Advisory Council or the Consumer Advisory Council, does their influence work indirectly through lobbying pressure on the executive and legislative branches which, in turn, may periodically transmit related signals to the Federal Reserve, or does their influence work simply because Federal Reserve officials pay attention to the opinions of spokespersons and analysts employed by private interest groups? Third, whatever the interest groups and their communications channels, can the signals be measured? If policy directives within formal institutions are not made public and if analysts, spokespersons, and lobbyists do not regularly receive public media exposure, evidence of signaling, not to mention responsiveness to it, will be difficult to uncover.
Keywords
- Monetary Policy
- Banking Industry
- Federal Reserve
- Fund Rate
- Monetary Aggregate
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
... the Federal Advisory Council has been virtually invisible and relatively unimportant.
— John T. Woolley, Monetary Politics.
No group of bankers anywhere can get control ...
— Woodrow Wilson on the Federal Reserve System as quoted in Donald Kettl, Leadership at the Fed.
This is a preview of subscription content, access via your institution.
Buying options
Preview
Unable to display preview. Download preview PDF.
References
Auerbach, Robert D. “Politics and the Federal Reserve.” Contemporary Policy Issues 3 (Fall 1985), 43–58.
Bach, George Leland. Making Monetary and Fiscal Policy. ( Washington: Brookings Institution, 1971 ).
Beck, Nathaniel. “Congress and the Fed; Why the Dog Doesn’t Bark in the Night.” In Thomas Mayer (ed.), The Political Economy of American Monetary Policy. ( New York: Cambridge University Press, 1990 ).
Greider, William. Secrets of the Temple. ( New York: Simon and Schuster, 1987 ).
Hastings, Delbert C., and Ross M. Robertson. “The Mysterious World of the Fed.” Business Horizons (Spring 1962 ), 97–104.
Havrilesky, Thomas. “The Effects of the Federal Reserve Reform Act on the Economic Affiliations of Directors of Federal Reserve Banks.” Social Science Quarterly 67 (June 1986), 393–401.
Havrilesky, Thomas. “Monetary Policy Signaling from the Administration to the Federal Reserve.” Journal of Money, Credit, and Banking 20 (February 1988a), 83–101.
Havrilesky, Thomas. “Electoral Cycles in Economic Policy.” Challenge 31 (July/August 1988b), 14–21.
Havrilesky, Thomas. “The Causes and Consequences of Big Bank PAC Contributions.” Journal of Financial Services Research 4 (1990), 431–451.
Havrilesky, Thomas. and Robert Schweitzer. “A Theory of FOMC Dissent Voting with Evidence from the Time Series. In Thomas Mayer (ed.), The Political Economy of American Monetary Policy. ( New York: Cambridge University Press, 1990 ).
Havrilesky, Thomas., and William P. Yohe and David Schirm. “The Economic Affiliations of Directors of Federal Reserve District Banks.” Social Science Quarterly 54 (December 1973), 608–622.
Kettl, Donald. Leadership at the Fed. ( New Haven: Yale University Press, 1986 ).
Lindley, James Thomas. “An Analysis of the Federal Advisory Council of the Federal Reserve System, 1914–1938.” Ph.D. dissertation, University of Georgia, 1977.
Lombra, Raymond, and Nicholas Karamouzis. “A Positive Analysis of the Policymaking Process of the Federal Reserve.” In Thomas Mayer (ed.), The Political Economy of American Monetary Policy. ( New York: Cambridge University Press, 1990 ).
U.S. Congress, House, Subcommittee on Domestic Finance and Committee on Banking and Currency. Hearings, The Federal Reserve after Fifty Years. (Washington: Government Printing Office, 1964).
Whittlesey, C. R. “Power and Influence in the Federal Reserve.” Economica (February 1963).
Woolley, John. Monetary Politics: The Federal Reserve and the Politics of Monetary Policy. New York: Cambridge University Press, 1984.
Author information
Authors and Affiliations
Rights and permissions
Copyright information
© 1993 Springer Science+Business Media New York
About this chapter
Cite this chapter
Havrilesky, T. (1993). Banking and Other Private Sector Influences on Monetary Policy. In: The Pressures on American Monetary Policy. Springer, Boston, MA. https://doi.org/10.1007/978-1-4757-2228-4_9
Download citation
DOI: https://doi.org/10.1007/978-1-4757-2228-4_9
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4757-2230-7
Online ISBN: 978-1-4757-2228-4
eBook Packages: Springer Book Archive