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Are district presidents more conservative than board governors?

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  • Geoffrey M. B. Tootell

Abstract

It is widely believed that the Federal Open Market Committee policy votes of Federal Reserve Bank presidents are more "conservative" than those of their Board governor counterparts. In both academia and Congress, the suspicion runs deep that the political appointment procedure exercised over Federal Reserve Board governors-nomination by the President and confirmation by the Senate-results in monetary policy that is more concerned with output and less concerned with inflation than the policy produced by the more politically independent District Bank presidents. ; This article examines the data to determine whether it supports this conventional wisdom. The statistical techniques used in this paper permit a test of the hypothesis necessary to support their conclusions. The evidence rejects the conclusion that significant differences exist.

Suggested Citation

  • Geoffrey M. B. Tootell, 1991. "Are district presidents more conservative than board governors?," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 3-12.
  • Handle: RePEc:fip:fedbne:y:1991:i:sep:p:3-12
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    File URL: http://www.bostonfed.org/economic/neer/neer1991/neer591a.pdf
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    References listed on IDEAS

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    1. Allen, Stuart D, 1986. "The Federal Reserve and the Electoral Cycle: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(1), pages 88-94, February.
    2. Barro, Robert J. & Gordon, David B., 1983. "Rules, discretion and reputation in a model of monetary policy," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 101-121.
    3. Belden, Susan, 1989. "Policy Preferences of FOMC Members as Revealed by Dissenting Votes," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(4), pages 432-441, November.
    4. Glenn T. Potts & Dudley G. Luckett, 1978. "Policy Objectives of the Federal Reserve System," The Quarterly Journal of Economics, Oxford University Press, vol. 92(3), pages 525-534.
    5. Puckett, Richard H., 1984. "Federal open market committee structure and decisions," Journal of Monetary Economics, Elsevier, vol. 14(1), pages 97-104, July.
    6. Abrams, Richard K & Froyen, Richard & Waud, Roger N, 1980. "Monetary Policy Reaction Functions, Consistent Expectations, and the Burns Era," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(1), pages 30-42, February.
    7. Havrilesky, Thomas, 1988. "Monetary Policy Signaling from the Administration to the Federal Reserve," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(1), pages 83-101, February.
    8. Havrilesky, Thomas M, 1987. "A Partisanship Theory of Fiscal and Monetary Regimes," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 19(3), pages 308-325, August.
    9. Gary Chamberlain, 1980. "Analysis of Covariance with Qualitative Data," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 225-238.
    10. Hakes, David R, 1990. "The Objectives and Priorities of Monetary Policy under Different Federal Reserve Chairmen," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(3), pages 327-337, August.
    11. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-491, June.
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    Cited by:

    1. Alessandro Riboni & Francisco J. Ruge-Murcia, 2008. "Preference Heterogeneity in Monetary Policy Committees," International Journal of Central Banking, International Journal of Central Banking, vol. 4(1), pages 213-233, March.
    2. Alexander Jung & Gergely Kiss, 2012. "Voting by monetary policy committees: evidence from the CEE inflation-targeting countries," MNB Working Papers 2012/2, Magyar Nemzeti Bank (Central Bank of Hungary).
    3. Thomas J. Pierce & Ken Rebeck, 2001. "Short-Run Monetary Policy And The Macroeconomic Environment," Contemporary Economic Policy, Western Economic Association International, vol. 19(4), pages 434-443, October.
    4. Ellen Meade, 2006. "Dissent and Disagreement on the Fed's FOMC: Understanding Regional Affiliations and limits to Transparency," DNB Working Papers 094, Netherlands Central Bank, Research Department.
    5. Eijffinger, Sylvester C W & Mahieu, Ronald J & Raes, Louis, 2015. "Hawks and Doves at the FOMC," CEPR Discussion Papers 10442, C.E.P.R. Discussion Papers.
    6. Brooks, Robert & Harris, Mark & Spencer, Christopher, 2007. "An Inflated Ordered Probit Model of Monetary Policy: Evidence from MPC Voting Data," MPRA Paper 8509, University Library of Munich, Germany.
    7. Hamza Bennani, 2016. "Measuring Monetary Policy Stress for Fed District Representatives," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(2), pages 156-176, May.
    8. Jung, Alexander & Kiss, Gergely, 2012. "Preference heterogeneity in the CEE inflation-targeting countries," European Journal of Political Economy, Elsevier, vol. 28(4), pages 445-460.
    9. Remsperger, Hermann, 2002. "The role of the Deutsche Bundesbank in the European System of Central Banks," Journal of Asian Economics, Elsevier, vol. 13(2), pages 137-156.

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