The Pressures on American Monetary Policy

1. Front Matter

   Pages i-xi

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2. Introduction

   • Thomas Havrilesky

   Pages 1-10

3. The Pressures on Monetary Policy: An Overview

   • Thomas Havrilesky

   Pages 11-27

4. Executive Branch Pressures on Monetary Policy: 1914–1991

   • Thomas Havrilesky

   Pages 29-80

5. Legislative Branch Pressures on Monetary Policy: 1914–1991

   • Thomas Havrilesky

   Pages 81-116

6. Monetary Policy Signaling from the Administration to the Federal Reserve

   • Thomas Havrilesky

   Pages 117-154

7. Federal Reserve Responsiveness to Threat-Augmented Signaling

   • Thomas Havrilesky

   Pages 155-194

8. The Causes of Signaling from the Administration and Threats from Congress to the Federal Reserve

   • Thomas Havrilesky

   Pages 195-220

9. Monetary Policy Signaling from Congress to the Federal Reserve

   • Thomas Havrilesky

   Pages 221-249

10. Banking and Other Private Sector Influences on Monetary Policy

    • Thomas Havrilesky

    Pages 251-284

11. The Power of Appointment and Monetary Policy

    • Thomas Havrilesky

    Pages 285-324

12. Implications for Monetary Reform

    • Thomas Havrilesky

    Pages 325-359

13. Erratum to: The Causes of Signaling from the Administration and Threats from Congress to the Federal Reserve

    • Thomas Havrilesky

    Pages 373-373

14. Erratum to: Monetary Policy Signaling from the Administration to the Federal Reserve

    • Thomas Havrilesky

    Pages 373-373

15. Erratum to: Introduction

    • Thomas Havrilesky

    Pages 373-373

16. Back Matter

    Pages 361-372

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The basic motivation for this book is my lifelong interest in the relationship between political processes and macroeconomic outcomes, especially in the area of monetary policy. Monetary policy is an area where political considerations regularly impact upon economic results. When my fascination with this subject began thirty years ago, none of the scholarly literature of that period engaged in modeling monetary policy, even as a constrained maximization problem, not to mention systematically linking it to politically-generated goals. My dissertation at the University of Illinois in 1966 and my first published article (in the Journal of Political Economy in 1967) addressed the modeling and estimation of the concerns that propel monetary policy. In the political and economic turbulence of the period from the late 1960s through the early 1980s, it became clear that the directions taken by monetary policy were changing with some frequency. Much of my published research during that period dealt with formal control­ theoretic models of monetary policy but some of it attempted to measure these changes and showed that monetary policy reactions to the state of the economy were not stable over time. Even during this early period I suggested reforms which might reduce the resulting instability in the economy. For example, my 1972 article in the Journal of Political Economy suggested systematic penalties Federal Reserve officials who failed to meet the goal of monetary stability by tying their budgets or salaries inversely to the rate of inflation.

• Policy
• banking
• economy
• macroeconomics
• monetary policy

• Duke University, Durham, USA

  Thomas Havrilesky

Policies and ethics