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Reforming The Fed: Its Independence And Lessons From Humphrey‐Hawkins

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  • ANTHONY BARRETT

Abstract

The last session of Congress witnessed renewed calls for reforming the Federal Reserve System so as to better coordinate monetary and fiscal policies. This paper examines how the current institutional structure, established by the Humphrey‐Hawkins Act of 1978, performed when the supply‐side tax cuts were implemented during 1981 and 1982. The findings reveal that authorities barely discussed the necessary policy coordination at the Humphrey‐Hawkins hearings. Further, the record reveals that Fed Chairman Volcker refused to utilize the Fed's independence to publicly oppose the supply‐side tax cuts.

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  • Anthony Barrett, 1991. "Reforming The Fed: Its Independence And Lessons From Humphrey‐Hawkins," Contemporary Economic Policy, Western Economic Association International, vol. 9(3), pages 76-81, July.
    • Handle: RePEc:bla:coecpo:v:9:y:1991:i:3:p:76-81
    DOI: 10.1111/j.1465-7287.1991.tb00343.x
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    References listed on IDEAS

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    1. Weintraub, Robert E., 1978. "Congressional supervision of monetary policy," Journal of Monetary Economics, Elsevier, vol. 4(2), pages 341-362, April.
    2. Pierce, James L., 1978. "The myth of congressional supervision of monetary policy," Journal of Monetary Economics, Elsevier, vol. 4(2), pages 363-370, April.
    3. Kane, Edward J., 1974. "The Re-Politicization of the Fed," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 9(5), pages 743-752, November.
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