EconPapers    
Economics at your fingertips  
 

Allies or Commitment Devices? A Model of Appointments to the Federal Reserve

Keith Schnakenberg, Ian R Turner and Alicia Uribe-McGuire
Additional contact information
Ian R Turner: Yale University

No b5zts, SocArXiv from Center for Open Science

Abstract: We present a model of executive-legislative bargaining over appointments to independent cen-tral banks in the face of an uncertain economy with strategic economic actors. The model highlights the contrast between two idealized views of Federal Reserve appointments. In one view, politicians prefer to appoint conservatively biased central bankers to overcome credible commitment problems that arise in monetary policy. In the other, politicians prefer to appoint allies, and appointments are well described by the spatial model used to describe appointments to other agencies. Both ideals are limiting cases of our model, which depend on the level of economic uncertainty. When economic uncertainty is extremely low, politicians prefer very conservative appointments. When economic uncertainty increases, politicians’ prefer central bank appointees closer to their own ideal points. In the typical case, the results are somewhere in between: equilibrium appointments move in the direction of politician’s preferences but with a moderate conservative bias.

Date: 2021-09-22
New Economics Papers: this item is included in nep-ban, nep-mac, nep-mon and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://osf.io/download/614924d8c968650027f7b705/

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:b5zts

DOI: 10.31219/osf.io/b5zts

Access Statistics for this paper

More papers in SocArXiv from Center for Open Science
Bibliographic data for series maintained by OSF ().

 
Page updated 2025-03-19
Handle: RePEc:osf:socarx:b5zts