Introduction
Introduction
Why Deliberation?
This chapter sets out the aim of the book—to examine systematically deliberation on monetary policy in the U.S. in two different institutions, the Federal Reserve and Congress. It establishes reasons why deliberation may matter in US monetary policy. For instance, even though the legal framework for the independence of the Fed has remained constant, (1) interpretations of this independence among policy makers and politicians have changed considerably — and so it may be important to gauge how their thinking and arguments on this have evolved; (2) policy makers do not generally envisage their decisions on monetary policy as falling along a single dimension, and so there are potential trade-offs to be made across dimensions, which may entail argued reasoning; (3) the uncertainty inherent to monetary policy decision making creates questions that in turn create the opportunity for deliberation; (4) studying the Fed and Congress together allows us insight into the ways in which each institutional setting shapes the ways that monetary policy is understood and discussed; and (5) studying deliberation provides insight into the effects of changes in transparency and the chairman’s leadership on the committees’ discussions.
Keywords: Deliberation, Monetary policy, Federal Reserve, Congress, Oversight, FOMC
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