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Words And Deeds: Symbolic Politics And Decision Making At The Federal Reserve

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  • Jim Granato
  • William West

Abstract

The Fed has often been accused of using ambiguity, concealment, and deception when it is subject to intense scrutiny and pressure. We investigate this issue by examining the relationship between the Fed's policy statements and its subsequent use of a key policy instrument, the federal funds rate. Our analysis shows that the Fed usually does what it says it will do during times of economic distress (recessions), but that its actions are more inclined to diverge from its stated intent when a sluggish economy coincides with presidential elections.

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  • Jim Granato & William West, 1994. "Words And Deeds: Symbolic Politics And Decision Making At The Federal Reserve," Economics and Politics, Wiley Blackwell, vol. 6(3), pages 233-255, November.
    • Handle: RePEc:bla:ecopol:v:6:y:1994:i:3:p:233-255
    DOI: 10.1111/j.1468-0343.1994.tb00099.x
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    Cited by:

    1. Jon Faust & John S. Irons, 1996. "Money, politics and the post-war business cycle," International Finance Discussion Papers 572, Board of Governors of the Federal Reserve System (U.S.).
    2. Zhiqiu Lin & Augustine Brannigan, 2003. "Advances in the Analysis of Non-stationary Time Series: An Illustration of Cointegration and Error Correction Methods in Research on Crime and Immigration," Quality & Quantity: International Journal of Methodology, Springer, vol. 37(2), pages 151-168, May.

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