Monetary Policy Signaling from the Administration to the Federal Reserve

An index of monetary policy signals from the Executive Branch to the Federal Reserve is developed. The index is a weekly sum of every article on monetary policy that appeared in the Wall Street Journal between Sep 1979 and Dec 1984. Each article in which the Administration expressed a desire for an...

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Bibliographic Details
Published in:Journal of money, credit and banking credit and banking, 1988-02, Vol.20 (1), p.83-101
Main Author: Havrilesky, Thomas
Format: Article
Language:English
Subjects:
Analytical forecasting
Bank credit
Causality
Credit
Economic policy
Federal Reserve Bank
Federal Reserve banks
Federal Reserve monetary policy
Influence
Interest rates
Macroeconomics
Monetary policy
Money supply
Polls
Presidents
Statistical forecasts
Theory
Voting
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Summary:An index of monetary policy signals from the Executive Branch to the Federal Reserve is developed. The index is a weekly sum of every article on monetary policy that appeared in the Wall Street Journal between Sep 1979 and Dec 1984. Each article in which the Administration expressed a desire for an easier monetary policy was given a value of +1. Every article in which the Administration asked for a tighter monetary policy was given a value of -1. Cumulative values of the index over a three-week period have a significant effect on the money supply at the end of the third week. This suggests that the monetary policy of the Federal Reserve is sensitive to signals from the Administration.
ISSN:0022-2879
1538-4616
DOI:10.2307/1992668