The myth of independence how congress governs the federal reserve

Event monetary policy april 24, 2018 the myth of independence. Pressure mounts as fed chief shepherds massive economic. The federal reserve, created by congress over 100 years ago, is often described as independent within our political system. The fed has not been independent perhaps it should be. How congress governs the federal reserve sarah binder, mark spindel on. Independence is central to the federal reserve s ability to choose policy actions that achieve price stability. How congress governs the federal reserve, sarah binder, a senior fellow at brookings and a. Offering a unique account of congresss role in steering this evolution, sarah binder and mark spindel explore the feds past, present, and future and challenge the myth of. Born out of crisis a century ago, the federal reserve has become the most powerful macroeconomic policymaker and financial regulator in the world. The fed loves main street as much as wall street this time. On october 25, in a new book, the myth of independence. How congress governs the federal reserve, sarah binder, a senior fellow at brookings and a professor of political science at george. How congress governs the federal reserve volume 16 issue 3 sarah binder, mark spindel read more article. The federal reserve has never really been independent, except for a narrowly defined definition of operational independence.

The myth of independence princeton university press. Sarah binder and mark spindel, the myth of independence. At best, the federal reserve earns partial and contingent independence from congress and thus barely any independence at all. Congress depends on the fed both to steer the economy. As sarah binder and mark spindel observe in their recent book, the myth of independence how congress governs the federal reserve. Offering a unique account of congresss role in steering this evolution, sarah binder and mark spindel explore the feds past, present, and future and challenge the. Sarah binder and spindel are coauthors of the awardwinning the myth of independence. The myth of independence traces the feds transformation from a weak, secretive, and decentralized institution in 19 to a remarkably transparent central bank a century later. How congress governs the federal reserve princeton university press, 2017. You can support the cato daily podcast and the cato institute. How do markets evaluate the interplay between congress and the federal reserve.