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REFORMING THE FED: ITS INDEPENDENCE AND LESSONS FROM HUMPHREY‐HAWKINS
Author(s) -
BARRETT ANTHONY
Publication year - 1991
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1991.tb00343.x
Subject(s) - independence (probability theory) , economics , session (web analytics) , monetary policy , economic policy , political science , public economics , macroeconomics , international economics , monetary economics , business , advertising , statistics , mathematics
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.