Shifting Mandates: The Federal Reserve's First Centennial

Carmen Reinhart and Kenneth Rogoff

American Economic Review, 2013, vol. 103, issue 3, 48-54

Abstract: The Federal Reserve's mandate has evolved considerably over the organization's hundred-year history. It was changed 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 argue for a return to multiple instruments, including a more active role for reserve requirements.

JEL-codes: E31 E44 E58 G21 G28 N11 N12 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/aer.103.3.48
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Citations: View citations in EconPapers (22)

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