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Central bank independence and the Federal Reserve's new operating regime

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  • Jordan, Jerry L.
  • Luther, William J.

Abstract

The Federal Reserve is exposed to a greater degree of political influence under its new operating regime. We survey the relevant literature and describe the Fed's new operating regime. Then we explain how the regime change reduced de facto central bank independence. In brief, the regime change increased the appointment power of the President and improved the bargaining power of Congress. We offer some suggestions for bolstering de facto independence at the Fed.

Suggested Citation

  • Jordan, Jerry L. & Luther, William J., 2022. "Central bank independence and the Federal Reserve's new operating regime," The Quarterly Review of Economics and Finance, Elsevier, vol. 84(C), pages 510-515.
    • Handle: RePEc:eee:quaeco:v:84:y:2022:i:c:p:510-515
    DOI: 10.1016/j.qref.2020.10.006
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    1. Cutsinger, Bryan P. & Luther, William J., 2022. "Seigniorage payments and the Federal Reserve’s new operating regime," Economics Letters, Elsevier, vol. 220(C).

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    More about this item

    Keywords

    Central bank; Central bank independence; Federal Reserve; Monetary policy; Political economy;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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