Central Bankers, Bureaucratic Incentives, and Monetary Policy (Financial and Monetary Policy Studies, 13)

By now it has become obvious that Federal Reserve actions have an immense impact on the functioning of our economy. As a result, a great deal of research has been done on the Fed and on monetary policy. Much of this work is normative; it tells us what the Fed should do. Positive work on the Fed has usually tried to elucidate particular Fed policies, and has not tried to present a theory of why the Fed behaves the way it does. The dominant theory of Fed behavior is that the Fed does what it believes to be best for the public welfare. This theory - usually left implicit - is so simple, and seemingly so obviously correct, that it has received widespread credence without extended discussion or tests. When thinking about govern­ ment in general many observers doubt that it nearly always acts in the public interest. However, they ascribe this unfortunate state of affairs mainly to political pressures. Since the Fed is relatively removed from such pressures, the public interest theory of government seems more applicable to it. Front Matter....Pages I-XIV Central Bankers, Bureaucratic Incentives, and Monetary Policy: an Introduction....Pages 1-7 Front Matter....Pages 9-9 Monetary Policy: Theory and Practice....Pages 11-35 Inflationary Bias of the Federal Reserve System....Pages 37-66 Preliminary Evidence on the Use of Inputs by the Federal Reserve System....Pages 67-90 The Structure and Use of Inputs by the Federal Reserve....Pages 91-104 Front Matter....Pages 105-105 The Choice of Monetary Instruments and the Theory of Bureaucracy(1)....Pages 107-128 Bureaucratic Theory and the Choice of Central Bank Goals....Pages 129-150 Research Activities and Budget Allocations Among Federal Reserve Banks....Pages 151-168 Banking Sector Influence on the Relationship of Congress to the Federal Reserve System....Pages 169-182 Front Matter....Pages 183-183 Politics and Fed Policymaking: The More Things Change the More They Remain the Same....Pages 185-198 Central Bank Independence: A\n International Comparison....Pages 199-217 A Private Central Bank: Some Olde English Lessons....Pages 219-239 Front Matter....Pages 241-241 Central Bankers and the Issue of Independence....Pages 243-249 Back Matter....Pages 251-251 The Society is supported by a large number of central banks, commercial banks and othe financial and business institutions, by treasury officials and by academics and others interested in monetary and financial problems. Since its establishment in 1963 it has developed as a forum for the exchange of information, research results and ideas, value by academics and practitioners in the fields, including central bank officials and civil servants responsible for formulating and applying monetary and financial policies Volumes were not produced for Colloquia held at Tarra gona, Spain in October 1970 under the title "Monetary Policy and New Develop ments in Banking" and at Strasbourg, France in January 1972 under the title "Aspects of European Monetary Union". The papers collected in this volume are those presented as the twelfth Colloquium arranged by the Societe Unversitaire Europeenne de Recherches Financieres (SUERF) which took place in Cambridge in March 1985 Edited By Eugenia Froedge Toma, Mark Toma. Includes Bibliographical References.