The Federal Reserve as a Bureaucracy: An Examination of Expense-Preference Behavior

William J Boyes, William Stewart Mounts and Clifford Sowell

Journal of Money, Credit and Banking, 1988, vol. 20, issue 2, 181-90

Abstract: In this paper, the Federal Reserve System is viewed as a bureaucracy with a bureau's incentive to increase expenses beyond the profit maximizing point. Moreover, the bureau consists of divisions, the district banks, that exhibit their own expense-prefer ence behavior. An empirical investigation of labor demand by the Boar d and district banks reported in this paper demonstrates that the Fed eral Reserve has engaged in expense-preference behavior and that the centralization of the monetary authority amplified this type of behav ior. Copyright 1988 by Ohio State University Press.

Date: 1988
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Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:20:y:1988:i:2:p:181-90

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