National monetary policy by regional design: the evolving role of the Federal Reserve banks in Federal Reserve System policy
This 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.
|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|
|Contact details of provider:|| Postal: |
Web page: http://www.stlouisfed.org/
More information through EDIRC
|Order Information:|| Email: |
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.:
- 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.
- 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.
- 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.
- Dewald, William G, 1972. "The National Monetary Commission: A Look Back," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 4(4), pages 930-56, November.
- Gorton, Gary, 1985. "Clearinghouses and the Origin of Central Banking in the United States," The Journal of Economic History, 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, pages 93-128.
- 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.
When requesting a correction, please mention this item's handle: RePEc:fip:fedlwp:1998-010. See general information about how to correct material in RePEc.
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.