IDEAS home Printed from https://ideas.repec.org/p/hal/spmain/hal-03567133.html
   My bibliography  Save this paper

Debates and dissident inside the FOMC during WW2

Author

Listed:
  • Etienne Farvaque

    (EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université de Lille, Sciences et Technologies - Université de Lille, Sciences Humaines et Sociales - PRES Université Lille Nord de France - Université de Lille, Droit et Santé)

  • Antoine Parent

    (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Piotr Stanek

Abstract

We demonstrate that even though during WWII the interest rate was close to zero supporting the financing of the military effort, dissent inside the FOMC occurred with a similar frequency to other policy episodes. Our analysis highlights that the debates which resulted in dissents turned around two broad issues: the size of the Fed's balance sheet as well as the functioning of and communication with financial markets. Thus, we argue that the conventional view depicting the Fed as merely accommodating treasury needs should be revised. Our detailed investigation of dissents emphasises the modernity of the objections raised by Fed officials.

Suggested Citation

  • Etienne Farvaque & Antoine Parent & Piotr Stanek, 2018. "Debates and dissident inside the FOMC during WW2," SciencePo Working papers Main hal-03567133, HAL.
    • Handle: RePEc:hal:spmain:hal-03567133
    DOI: 10.1080/00076791.2018.1517752
    Note: View the original document on HAL open archive server: https://hal-sciencespo.archives-ouvertes.fr/hal-03567133
    as

    Download full text from publisher

    File URL: https://hal-sciencespo.archives-ouvertes.fr/hal-03567133/document
    Download Restriction: no
    File URL: https://libkey.io/10.1080/00076791.2018.1517752?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Toma, Mark, 1992. "Interest Rate Controls: The United States in the 1940s," The Journal of Economic History, Cambridge University Press, vol. 52(3), pages 631-650, September.
    2. Lohmann, Susanne, 1992. "Optimal Commitment in Monetary Policy: Credibility versus Flexibility," American Economic Review, American Economic Association, vol. 82(1), pages 273-286, March.
    3. Paolo Surico, 2008. "Measuring the Time Inconsistency of US Monetary Policy," Economica, London School of Economics and Political Science, vol. 75(297), pages 22-38, February.
    4. Arvind Krishnamurthy & Annette Vissing-Jorgensen, 2011. "The Effects of Quantitative Easing on Interest Rates: Channels and Implications for Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 215-287.
    5. Jing Cynthia Wu & Fan Dora Xia, 2016. "Measuring the Macroeconomic Impact of Monetary Policy at the Zero Lower Bound," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 48(2-3), pages 253-291, March.
    6. Damette, Olivier & Parent, Antoine, 2018. "Did The Fed Respond To Liquidity Shortage Episodes During The Great Depression?," Macroeconomic Dynamics, Cambridge University Press, vol. 22(7), pages 1727-1749, October.
    7. Michael D. Bordo & Arunima Sinha, 2016. "A Lesson from the Great Depression that the Fed Might Have Learned: A Comparison of the 1932 Open Market Purchases with Quantitative Easing," Economics Working Papers 16113, Hoover Institution, Stanford University.
    8. Anne Sibert, 2006. "Central Banking by Committee," International Finance, Wiley Blackwell, vol. 9(2), pages 145-168, August.
    9. Robert L. Hetzel & Ralph F. Leach, 2001. "After the accord : reminiscences on the birth of the modern Fed," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 57-64.
    10. Hetzel,Robert L., 2008. "The Monetary Policy of the Federal Reserve," Cambridge Books, Cambridge University Press, number 9780521881326, November.
    11. Robert P. Flood & Peter Isard, 1989. "Monetary Policy Strategies," IMF Staff Papers, Palgrave Macmillan, vol. 36(3), pages 612-632, September.
    12. Cukierman Alex & Muscatelli Anton, 2008. "Nonlinear Taylor Rules and Asymmetric Preferences in Central Banking: Evidence from the United Kingdom and the United States," The B.E. Journal of Macroeconomics, De Gruyter, vol. 8(1), pages 1-31, February.
    13. Richard H. Timberlake, 1999. "The tale of another chairman," The Region, Federal Reserve Bank of Minneapolis, vol. 13(Jun), pages 32-35,64,67.
    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. repec:spo:wpmain:info:hdl:2441/2cuu3uj58199fphtovctj05ish is not listed on IDEAS
    2. repec:hal:spmain:info:hdl:2441/2cuu3uj58199fphtovctj05ish is not listed on IDEAS
    3. Robert Hetzel, 2021. "The Recovery from the Great Recession: Did the FOMC Learn the Right Lessons?," Working Papers 3125, George Mason University, Mercatus Center.
    4. Hetzel, Robert, 2021. "The Recovery from the Great Recession: Did the FOMC Learn the Right Lessons?," Working Papers 10958, George Mason University, Mercatus Center.
    5. Cukierman, Alex & Spiegel, Yossi & Leiderman, Leonardo, 2004. "The choice of exchange rate bands: balancing credibility and flexibility," Journal of International Economics, Elsevier, vol. 62(2), pages 379-408, March.
    6. Swanson, Eric T., 2021. "Measuring the effects of federal reserve forward guidance and asset purchases on financial markets," Journal of Monetary Economics, Elsevier, vol. 118(C), pages 32-53.
    7. Alan S. Blinder, 2007. "On the Design of Monetary Policy Committees," Working Papers 1030, Princeton University, Department of Economics, Center for Economic Policy Studies..
    8. Richard Mash, 2000. "The Time Inconsistency of Monetary Policy with Inflation Persistence," Economics Series Working Papers 15, University of Oxford, Department of Economics.
    9. Huiping Yuan & Stephen M. Miller & Langnan Chen, 2011. "The Optimality And Controllability Of Monetary Policy Through Delegation With Consistent Targets," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(1), pages 82-106, February.
    10. Christophe Blot & Paul Hubert & Fabien Labondance, 2017. "Does monetary policy generate asset price bubbles ?," Documents de Travail de l'OFCE 2017-05, Observatoire Francais des Conjonctures Economiques (OFCE).
    11. SCHELLEKENS, Philip, 1999. "Optimal monetary policy delegation to conservative central banks," Working Papers 1999009, University of Antwerp, Faculty of Business and Economics.
    12. Kinda Hachem & Jing Cynthia Wu, 2017. "Inflation Announcements and Social Dynamics," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(8), pages 1673-1713, December.
    13. Alan S. Blinder, 2009. "Making Monetary Policy by Committee," International Finance, Wiley Blackwell, vol. 12(2), pages 171-194, August.
    14. Torben Andersen, 1998. "Shocks and the Viability of a Fixed Exchange Rate Commitment," Open Economies Review, Springer, vol. 9(2), pages 139-156, April.
    15. repec:spo:wpmain:info:hdl:2441/2geqol5jud8hgonsak4roj21gh is not listed on IDEAS
    16. Obstfeld, Maurice, 1997. "Destabilizing effects of exchange-rate escape clauses," Journal of International Economics, Elsevier, vol. 43(1-2), pages 61-77, August.
    17. Davide Debortoli & Jordi Galí & Luca Gambetti, 2020. "On the Empirical (Ir)Relevance of the Zero Lower Bound Constraint," NBER Macroeconomics Annual, University of Chicago Press, vol. 34(1), pages 141-170.
    18. Aßhoff, Sina & Belke, Ansgar & Osowski, Thomas, 2021. "Unconventional monetary policy and inflation expectations in the Euro area," Economic Modelling, Elsevier, vol. 102(C).
    19. Margaux MacDonald & Michał Ksawery Popiel, 2020. "Unconventional Monetary Policy in a Small Open Economy," Open Economies Review, Springer, vol. 31(5), pages 1061-1115, November.
    20. Kenneth Kuttner & Adam Posen, 2011. "How Flexible Can Inflation Targeting Be and Still Work?," Department of Economics Working Papers 2011-10, Department of Economics, Williams College, revised Sep 2011.
    21. Alba Carlos & Cuadra Gabriel & Ibarra Raúl, 2023. "Effects of the Extraordinary Measures Implemented by Banco de México during the COVID-19 Pandemic on Financial Conditions," Working Papers 2023-03, Banco de México.
    22. Nikolay Hristov & Oliver Hülsewig & Johann Scharler, 2021. "Unconventional Monetary Policy Shocks in the Euro Area and the Sovereign-Bank Nexus," International Journal of Central Banking, International Journal of Central Banking, vol. 17(3), pages 337-383, September.
    23. Clark, Peter B. & Goodhart, Charles A. E. & Huang, Haizhou, 1999. "Optimal monetary policy rules in a rational expectations model of the Phillips curve," Journal of Monetary Economics, Elsevier, vol. 43(2), pages 497-520, April.

    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:hal:spmain:hal-03567133. 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: Contact - Sciences Po Departement of Economics (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.