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Do federal reserve bank presidents have a regional bias?

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  • Jung, Alexander
  • Latsos, Sophia

Abstract

This paper examines whether the monetary policy deliberations of the FOMC have been influenced by regional considerations. We explain individual interest rate preferences by district, and use real-time data to estimate Taylor-type rules (sample 1990 to 2008). In line with the literature, this paper confirms that regional variables are explanatory factors of the interest rate preferences of most Reserve Bank Presidents. A new finding is that only few Reserve Bank Presidents display a regional bias in their interest rate preferences. Given their nature and size, these biases did not impede on the Fed's capacity to set interest rates with a nationwide focus.

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  • Jung, Alexander & Latsos, Sophia, 2015. "Do federal reserve bank presidents have a regional bias?," European Journal of Political Economy, Elsevier, vol. 40(PA), pages 173-183.
    • Handle: RePEc:eee:poleco:v:40:y:2015:i:pa:p:173-183
    DOI: 10.1016/j.ejpoleco.2015.06.004
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    More about this item

    Keywords

    Individual Taylor-type rules; Regional bias; Real-time data; Interest rate preferences;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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