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The Influence of Economists On the Federal Reserve Act

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  • Barbara Caporale

Abstract

Many economists helped to lay the groundwork for the Federal Reserve. Some did important work analyzing the problems of the National Bank System and arguing for formation of a central bank in economics journals. At least as importantly, if not more so, some economists took an active role in the reform movement and provided help and advice with the actual Congressional bill. Among these are J. Lawrence Laughlin, who chaired a group that actively raised support for the Federal Reserve Act in Congressional districts, and H. Parker Willis, who served as an expert for the subcommittee which wrote the original draft of what became the Federal Reserve Act. More broadly, this episode illustrates the impact that intellectuals and ideas can have on actual events; the analysis contemporary economists did in academic journals and in more political activities before and after the panic of 1907 guided the actual formation of a working central bank (JEL B10, N21).

Suggested Citation

  • Barbara Caporale, 2003. "The Influence of Economists On the Federal Reserve Act," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(3), pages 311-325, August.
    • Handle: RePEc:bla:scotjp:v:50:y:2003:i:3:p:311-325
    DOI: 10.1111/1467-9485.5003004
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    References listed on IDEAS

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    1. Haubrich, Joseph G., 1990. "Nonmonetary effects of financial crises : Lessons from the great depression in Canada," Journal of Monetary Economics, Elsevier, vol. 25(2), pages 223-252, March.
    2. A. Piatt Andrew, 1908. "Substitutes for Cash in the Panic of 1907," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 22(4), pages 497-516.
    3. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1.
    4. Bernanke, Ben S, 1983. "Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression," American Economic Review, American Economic Association, vol. 73(3), pages 257-276, June.
    5. Timberlake, Richard H, Jr, 1984. "The Central Banking Role of Clearinghouse Associations," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(1), pages 1-15, February.
    6. Franklin MacVeagh, 1911. "Banking and Currency Reform," Journal of Political Economy, University of Chicago Press, vol. 19(10), pages 809-809.
    7. H. Parker Willis, 1912. "The Banking Question in Congress," Journal of Political Economy, University of Chicago Press, vol. 20(9), pages 869-869.
    8. Caporale, Tony & McKiernan, Barbara, 1998. "Interest Rate Uncertainty and the Founding of the Federal Reserve," The Journal of Economic History, Cambridge University Press, vol. 58(4), pages 1110-1117, December.
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    Cited by:

    1. Singleton,John, 2010. "Central Banking in the Twentieth Century," Cambridge Books, Cambridge University Press, number 9780521899093, August.

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    More about this item

    JEL classification:

    • B10 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - General
    • N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913

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