Shifting Mandates: The Federal Reserve's First Centennial

Carmen Reinhart and Kenneth Rogoff

No 18888, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The mandate of the Federal Reserve has evolved considerably over its hundred-year history. From an initial focus in 1913 on financial stability, to fiscal financing in World War II and its aftermath, to a strong anti-inflation focus from the late 1970s, and then back to greater emphasis on financial stability since the Great Contraction. Yet, as the Fed's mandate has expanded in recent years, its range of instruments has narrowed, partly based on a misguided belief in the inherent stability of financial markets. We briefly discuss the active use in an earlier era of multiple instruments, including reserve requirements, credit controls and interest rate ceilings.

JEL-codes: E02 E5 N1 N12 N2 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-his, nep-mac and nep-mon
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Published as Carmen M. Reinhart & Kenneth S. Rogoff, 2013. "Shifting Mandates: The Federal Reserve's First Centennial," American Economic Review, American Economic Association, vol. 103(3), pages 48-54, May.

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