Abstract
Chapters Four and Five provided evidence that the Administration directly influences monetary policy over time by informally signaling Federal Reserve officials. In contrast, although there is evidence in the literature of possible indirect Congressional influence in the form of a correlation between the liberal/conservative ranking of the Chair of the Senate Banking Committee and an ease/tightness bias in monetary policy (Grier, 1991), there is no evidence that informal signaling by Congresspersons has an effect on monetary policy as direct as that of the executive branch (Havrilesky, 1988). For example, an index of signals from Congress to the Federal Reserve (SCFER) was constructed in the same way as the SAFER index in Chapter Two.
I believe ... that the Resident and Congress are responsible for detemining the proper goals for the economy. I assume that most FOMC members ... followed a similar line of reasoning.
—Former Federal Reserve Governor Sherman Maisel, Managing the Dollar.
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Havrilesky, T. (1995). Monetary Policy Signaling from Congress to the Federal Reserve. In: The Pressures on American Monetary Policy. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-0653-5_8
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