National monetary policy by regional design: the evolving role of the Federal Reserve banks in Federal Reserve System policy
AbstractThis paper examines the history of Federal Reserve Bank input into Federal Reserve System monetary policymaking. From the Fed's founding in 1914 through the Great Depression, the Reserve Banks held the balance of power. Dissatisfaction with the Fed's performance, however, led to a wholesale reorganization in 1935 that greatly enhanced the authority of the Federal Reserve Board, but retained a role for the Federal Banks through the membership of their presidents on the FOMC, as well as in setting the discount rate. I argue that the Fed's decentralized structure was not the principal cause of Fed errors during the Great Depression. In addition, by retaining a role for the Federal Reserve Banks, the Fed's present structure provides the System with a measure of political independence and encourages a competition of ideas within the System that enhances the quality of policymaking.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 1998-010.
Date of creation: 1999
Date of revision:
Publication status: Published in Regional aspects of monetary policy in Europe. J. von Hagen and> C. Waller, editors. Kluwer Academic Publishers, 1999
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gorton, Gary, 1985. "Clearinghouses and the Origin of Central Banking in the United States," The Journal of Economic History, Cambridge University Press, Cambridge University Press, vol. 45(02), pages 277-283, June.
- DeLong, J. Bradford & Summers, Lawrence H., 1992.
"Macroeconomic policy and long-run growth,"
Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City,
Federal Reserve Bank of Kansas City, pages 93-128.
- Richard G. Anderson & Kenneth A. Kavajecz, 1994. "A historical perspective on the Federal Reserve's monetary aggregates: definition, construction and targeting," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 1-31.
- Leonall C. Andersen & Jerry L. Jordon, 1968. "Monetary and fiscal actions: a test of their relative importance in economic stabilization," Review, Federal Reserve Bank of St. Louis, issue Nov, pages 11-23.
- Leonall C. Andersen & Keith M. Carlson, 1970. "A monetarist model for economic stabilization," Review, Federal Reserve Bank of St. Louis, issue Apr, pages 7-25.
- Dewald, William G, 1972. "The National Monetary Commission: A Look Back," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 4(4), pages 930-56, November.
- Richard G. Anderson & Kenneth A. Kavajecz, 1994. "A historical perspective on the Federal Reserve's monetary aggregates: definition, construction and targeting," Proceedings, Federal Reserve Bank of St. Louis, issue Mar, pages 1-31.
- Andrew Hughes Hallett & Laura Piscitelli, 2002. "Does One Size Fit All? A currency union with asymmetric transmissions and a stability pact," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(1), pages 71-96.
- Federal Reserve System in Wikipedia German ne '')
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Xiao).
If references are entirely missing, you can add them using this form.