IDEAS home Printed from https://ideas.repec.org/a/bla/coecpo/v9y1991i3p59-70.html
   My bibliography  Save this article

Rationale For Dissent: The Case Of Fomc Members

Author

Listed:
  • SUSAN BELDEN

Abstract

This paper investigates monetary policymakers' rationale for dissent to test for a hypothesized difference in policy preferences between bank presidents and members of the Board of Governors. The paper analyzes the cited reasons for dissent, the identity of the dissenter, and uses multiple regression to make inferences regarding the differences. Examining the identity of dissenters and the given reasons for dissent yields four conclusions, (i) A broad base of bank presidents dissent for tighter policy because they want to control inflation by keeping monetary aggregates within targeted ranges. (ii) On the other hand, board members' dissent for tighter policy is dominated by one man–Henry Wallich—who apparently was disturbed by the inflationary outbreak during the late 1970s and early 1980s. (Hi) Several board members dissent for looser policy to stimulate the real economy, (iv) But only a few bank presidents, primarily from the Northeast, dissent for looser policy with the same objective. Regression analysis supports the assertion that bank presidents dissenting for tighter policy do so to keep monetary aggregates on target in order to control inflation. The analysis confirms Wallich's focus on inflation during the late 1970s and early 1980s. It also allows for the possibility that the various board members dissenting for looser policy either have an inherent preference for looser policy or have diverse reasons for dissent.

Suggested Citation

  • Susan Belden, 1991. "Rationale For Dissent: The Case Of Fomc Members," Contemporary Economic Policy, Western Economic Association International, vol. 9(3), pages 59-70, July.
    • Handle: RePEc:bla:coecpo:v:9:y:1991:i:3:p:59-70
    DOI: 10.1111/j.1465-7287.1991.tb00341.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1465-7287.1991.tb00341.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1465-7287.1991.tb00341.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Puckett, Richard H., 1984. "Federal open market committee structure and decisions," Journal of Monetary Economics, Elsevier, vol. 14(1), pages 97-104, July.
    2. Alesina, Alberto & Rosenthal, Howard, 1989. "Partisan Cycles in Congressional Elections and the Macroeconomy," American Political Science Review, Cambridge University Press, vol. 83(2), pages 373-398, June.
    3. 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.
    4. 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.
    5. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rob Roy McGregor, 1996. "Fomc Voting Behavior And Electoral Cycles: Partisan Ideology And Partisan Loyalty," Economics and Politics, Wiley Blackwell, vol. 8(1), pages 17-32, March.
    2. Chappell, Henry Jr. & Havrilesky, Thomas M. & McGregor, Rob Roy, 1995. "Policymakers, institutions, and central bank decisions," Journal of Economics and Business, Elsevier, vol. 47(2), pages 113-136, May.
    3. 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.
    4. Lohmann, Susanne, 1997. "Partisan control of the money supply and decentralized appointment powers," European Journal of Political Economy, Elsevier, vol. 13(2), pages 225-246, May.
    5. Umeno, Luis Gustavo & Bugarin, Maurício Soares, 2008. "Electoral Control in the Presence of Moral Hazard and Adverse Selection," Brazilian Review of Econometrics, Sociedade Brasileira de Econometria - SBE, vol. 28(1), May.
    6. William D. Nordhaus, 1989. "Alternative Approaches to the Political Business Cycle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(2), pages 1-68.
    7. Eric Dubois, 2016. "Political business cycles 40 years after Nordhaus," Public Choice, Springer, vol. 166(1), pages 235-259, January.
    8. Vítor Castro & Rodrigo Martins, 2021. "What drives the duration of credit booms?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 1531-1549, January.
    9. Belke, Ansgar & Potrafke, Niklas, 2012. "Does government ideology matter in monetary policy? A panel data analysis for OECD countries," Journal of International Money and Finance, Elsevier, vol. 31(5), pages 1126-1139.
    10. Karl Kaltenthaler, 2003. "Managing the Euro," European Union Politics, , vol. 4(3), pages 329-349, September.
    11. Ansgar Belke & Niklas Potrafke, 2009. "Does Government Ideology Matter in Monetary Policy? – A Panel Data Analysis for OECD Countries," Ruhr Economic Papers 0094, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    12. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.
    13. Eijffinger, Sylvester & Mahieu, Ronald & Raes, Louis, 2015. "Hawks and Doves at the FOMC," CEPR Discussion Papers 10442, C.E.P.R. Discussion Papers.
    14. Stone, Joe A. & Jacobs, David, 2020. "Presidential party affiliation and electoral cycles in the U.S. economy: Evidence from party changes in adjacent terms," Journal of Macroeconomics, Elsevier, vol. 64(C).
    15. Gebhard Kirchgässner, 2016. "Voting and Popularity," CREMA Working Paper Series 2016-08, Center for Research in Economics, Management and the Arts (CREMA).
    16. Arnab Bhattacharjee & Sean Holly, 2010. "Rational Partisan Theory, Uncertainty, And Spatial Voting: Evidence For The Bank Of England'S Mpc," Economics and Politics, Wiley Blackwell, vol. 22(2), pages 151-179, July.
    17. Karsten Müller, 2023. "Electoral Cycles in Macroprudential Regulation," American Economic Journal: Economic Policy, American Economic Association, vol. 15(4), pages 295-322, November.
    18. James E. Alt, 1991. "Leaning into the Wind or Ducking out of the Storm: U.S. Monetary Policy in the 1980s," NBER Chapters, in: Politics and Economics in the Eighties, pages 41-82, National Bureau of Economic Research, Inc.
    19. Christina D. Romer & David H. Romer, 1997. "Institutions for Monetary Stability," NBER Chapters, in: Reducing Inflation: Motivation and Strategy, pages 307-334, National Bureau of Economic Research, Inc.
    20. Morris P. Fiorina, 1991. "Elections and the Economy in the 1980s: Short- and Long-Term Effects," NBER Chapters, in: Politics and Economics in the Eighties, pages 17-40, National Bureau of Economic Research, Inc.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:coecpo:v:9:y:1991:i:3:p:59-70. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/weaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.