Regional influences on U.S. monetary policy: some implications for Europe

Ellen Meade and Nathan Sheets

No 721, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper looks at the monetary policy decisions of the U.S. Federal Reserve and asks whether those decisions have been influenced solely by national concerns, or whether regional factors have played a role. All of the Federal Reserve's policymakers have some regional identity, i.e., either their positions explicitly carry some regional affiliation or their region of origin is a factor that must be considered in the selection process. This research is relevant for the Fed, and it may also be relevant for Europe's fledgling central bank in Frankfurt. Critics have asserted that ECB policymakers have an incentive to base policy on national developments and respond to national political pressures. We find that Fed policymakers do take into account developments in regional unemployment when deciding monetary policy, and that these regional developments are more important for central bankers at the hub than in the spokes. These findings are robust to a variety of different specifications of the voting equation.

Keywords: Federal Open Market Committee; European Central Bank; Monetary policy (search for similar items in EconPapers)
Date: 2002
New Economics Papers: this item is included in nep-eec and nep-mon
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Citations: View citations in EconPapers (36)

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Related works:
Working Paper: Regional Influences on U.S. Monetary Policy: Some Implications for Europe (2002)
Working Paper: Regional influences on U.S. monetary policy: some implications for Europe (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:721

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