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The Transformation Of Economic Analysis At The Board Of Governors Of The Federal Reserve System During The 1960s

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  • Acosta, Juan
  • Cherrier, Beatrice

Abstract

In this paper, we build on data on officials of the Federal Reserve System, oral history repositories, and hitherto underresearched archival sources to unpack the tortuous path toward crafting an institutional and intellectual space for postwar economic analysis within the Board of Governors of the Federal Reserve System. We show that growing attention to new macroeconomic research was a reaction to both mounting external criticisms against the Fed’s decision-making process and the spread of new macroeconomic theories and econometric techniques. We argue that the rise of the number of PhD economists working at the Fed is a symptom rather than a cause of this transformation. Key to our story are a handful of economists from the Board of Governors’ Division of Research and Statistics (DRS) who did not hold a PhD but envisioned their role as going beyond mere data accumulation and got involved in large-scale macroeconometric model building. We conclude that the divide between PhD and non-PhD economists may not be fully relevant to understand both the shift in the type of economics practiced at the Fed and the uses of this knowledge in the decision-making process. Equally important was the rift between different styles of economic analysis.

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  • Acosta, Juan & Cherrier, Beatrice, 2021. "The Transformation Of Economic Analysis At The Board Of Governors Of The Federal Reserve System During The 1960s," Journal of the History of Economic Thought, Cambridge University Press, vol. 43(3), pages 323-349, September.
    • Handle: RePEc:cup:jhisec:v:43:y:2021:i:3:p:323-349_1
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    Cited by:

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    2. Aurélien Goutsmedt & Francesco Sergi & Béatrice Cherrier & François Claveau & Clément Fontan & Juan Acosta, 2023. "To change or not to change The evolution of forecasting models at the Bank of England," Working Papers hal-04181871, HAL.
    3. Aurélien Goutsmedt & Francesco Sergi & François Claveau & Clément Fontan, 2023. "The Different Paths of Central Bank Scientization: The Case of the Bank of England," Working Papers hal-04267004, HAL.
    4. Aurélien Goutsmedt & Cléo Chassonnery-Zaïgouche, 2023. "Modeling intervention: The Political element in Barbara Bergmann's micro-to-macro simulation projects," Working Papers hal-04208686, HAL.
    5. Acosta, Juan & Rancan, Antonella & Sergi, Francesco, 2023. "Multi-country modelling at the commission of the European communities: Centralised and decentralised approaches," European Economic Review, Elsevier, vol. 158(C).
    6. Acosta, Juan & Rancan, Antonella & Sergi, Francesco, 2022. "Centralised and Decentralised Approaches to Multi-Country Macroeconometric Modelling at the Commission of the European Communities: The Short-Lived EUROLINK Model," Economics & Statistics Discussion Papers esdp22081, University of Molise, Department of Economics.

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