A multinominal logit analysis of the influence of policy variables and board experience on FOMC voting behavior

Previous studies have used probit or logit models to analyze two states of monetary policy (tighter or looser). In this paper we employ multinominal logit to permit Federal Reserve monetary policy to assume one of three alternative states (tighter, looser, or no change) as a function of three independent economic variables (unemployment, real growth, and inflation) and the amount of experience of the Board of Governors. The results indicate that the Federal Reserve reacted differently under Burns, Miller and Volcker and between Volcker's two operating procedures in the formulation of monetary policy.     

Decreasing Improper Payments in a Complex Federal Program

Since the early 2000s, the U.S. federal government has placed increasing focus on combating improper payments. Implementing policies to control improper payments is no easy task. Federal programs are often large, complex, riddled with moral hazard concerns, and jointly implemented. In 2011, the U.S. Department of Labor adopted a national strategy to combat improper payments in the Unemployment Insurance program. This article examines the effect that the Department of Labor's strategic initiative had on lowering states’ improper payments. Findings show that two of its tools—mandatory cross matching of employment records between the National Directory of New Hires and State Directories of New Hires and a communication strategy known as messaging—played a statistically significant role in halting the rise of improperly paid unemployment insurance claims. These results suggest that information technology tools and increased communication among stakeholders can be effective in lowering improper payments and improving government performance.     

Unconventional monetary policy spillovers: Evidence from India

Many of the studies on the unconventional monetary policy spillover effects concentrated primarily on the policy announcements of the U.S. Federal Reserve. Using a time series approach, with dummies in the event study framework, this study estimates the monetary policy spillover effects of the unconventional monetary policy announcements of the central banks of four major economic regions: the United States, the United Kingdom, European Central bank, and Japan on the asset prices in India. In addition to that, this study estimates the asymmetry in the responses to positive and negative surprise announcements. The study reveals that unconventional monetary surprises do not have any significant impact on the asset prices in India in a narrow time window.     

A commentary on “Does the Fed contribute to a political business cycle?”

Abrams and Iossifov (2006) find that during 1957–2004, monetary policy turned significantly more expansionary prior to U.S. presidential elections when the Federal Reserve chairman and the incumbent president belonged to the same political party. However, their long sample period obscures changes in trends during the period stemming from advances in macroeconomic theory and in the implementation of monetary policy. Indeed, when one considers only the Volcker–Greenspan era (1979–2004), there is insufficient evidence to accept the notion of a political business cycle effect.     

Interorganizational Mobility within the U.S. Federal Government: Examining the Effect of Individual and Organizational Factors

Interorganizational mobility can make a positive contribution both organizationally and government‐wide. Using data from the U.S. Federal Employee Viewpoint Survey, this article seeks to provide a better empirical understanding of the determinants of interorganizational mobility within the U.S. federal government. A specific analytical framework is used, as the intention to take another job within the federal government is nested in the intention to leave the current organization. The results highlight that gender, minority status, length of service, and promotion are determinants of interorganizational mobility within the U.S. federal government.     

Does the Fed Contribute to a Political Business Cycle?

In contrast to findings of other studies, evidence is presented to support the existence of a Federal Reserve-induced political monetary cycle that corresponds to the U.S. presidential election cycle. Using various Taylor rules, we find support for the view that Fed policy turns significantly more expansionary in the seven quarters prior to the election, but only when the Fed chair and incumbent presidential party have partisan affiliations.     

When the Interest Rate on the National Debt Is a Policy Variable (and “Printing Money” Does Not Apply)

Modern Monetary Theory (MMT) argues that the interest rate on the national debt for a monetary sovereign is a policy variable, not subject to whether bond markets “accept” or “reject” it. This paper defines measures of the components of the standard analysis of fiscal sustainability. It then methodically describes the Federal Reserve's operations relevant for understanding why interest rates on government debt in the United States have been and continue to be driven by monetary policy. A corollary that emerges—“printing money,” as economists usually understand it—is not applicable and has never been advocated by MMT.     

Performance Federalism and Local Democracy: Theory and Evidence from School Tax Referenda

Federal governments are increasingly employing empirical measures of lower‐level government performance to ensure that provincial and local jurisdictions pursue national policy goals. We call this burgeoning phenomenon “performance federalism” and argue that it can distort democratic accountability in lower‐level elections. We estimate the impact of a widely publicized federal indicator of local school district performance—one that we show does not allow voters to draw valid inferences about the quality of local educational institutions—on voter support for school tax levies in a U.S. state uniquely appropriate for this analysis. The results indicate that a signal of poor district performance increases the probability of levy failure, a substantively large and robust effect that disproportionately affects impoverished communities. The analysis employs a number of identification strategies and tests for multiple behavioral mechanisms to support the causal interpretation of these findings.     

RESPONSIBLE PARTY GOVERNMENT AND STABLE COALITION: THE CASE OF THE GERMAN FEDERAL REPUBLIC

Abstract. The paper examines the internal stability of the S.P.D.-F.D.P. coalition which has governed the Federal Republic since 1969 and in particular the way in which foreign policy determined relations between government and opposition between 1969 and 1972. It also examines the ideological divisions within the S.P.D. and C.D.U./C.S.U., their exacerbation by the close result of the 1976 election and the effect this could have on further developments. It concludes that the 'stable coalition' in power since 1969, even if it fails to last its full term, is an important variant in the recognized typology of governments, and therefore of interest to the student of comparative government.     

Forecast dispersion,dissenting votes,and monetary policy preferences of FOMC members: the role of individual career characteristics and political aspects

Using data from 1992 to 2001, we study the impact of members’ economic forecasts on the probability of casting dissenting votes in the Federal Open Market Committee (FOMC). Employing standard ordered probit techniques, we find that higher individual inflation and real GDP growth forecasts (relative to the committee’s median) significantly increase the probability of dissenting in favor of tighter monetary policy, whereas higher individual unemployment rate forecasts significantly decrease it. Using interaction models, we find that FOMC members with longer careers in government, industry, academia, non-governmental organizations (NGOs), or on the staff of the Board of Governors are more focused on output stabilization, while FOMC members with longer careers in the financial sector or on the staffs of regional Federal Reserve Banks are more focused on inflation stabilization. We also find evidence that politics matters, with Republican appointees being much more focused on inflation stabilization than Democratic appointees. Moreover, during the entire Clinton administration ‘natural’ monetary policy preferences of Bank presidents and Board members for inflation and output stabilization were more pronounced than under periods covering the administrations of both George H.W. Bush and George W. Bush, respectively.     

How does the economy shape policy preferences?

How do changes in the economy translate into shifts in aggregate preferences for a more or less activist government in the U.S.—a construct referred to as “policy mood”? Existing theories pose alternative explanations based on either a Maslow Hierarchy of Needs model, where citizens prefer an activist federal government to expand the social safety net when the economic future looks bright (Durr, 1993), or a Phillips Curve model (Erikson et al., 2002), in which the objective economic maladies of inflation and unemployment drive policy mood. We show that neither of these explanations withstands empirical scrutiny when analysis is extended beyond the time period of the original authors' work, suggest the existing wisdom tying the economy to policy mood is wrong, and offer some alternative avenues to pursue in search of an answer to the question: What moves policy mood?     

Opaque rather than transparent: Why the public cannot monitor monetary policy

Federal Reserve officials and many observers of monetary policy claim that the implementation of monetary policy has become more “transparent” over the last decade. This paper argues that monetary policy is anything but transparent because multiple and conflicting goals for monetary policy still exist, precise targets for these goals never are defined, the Fed’s economic model is unknown to the public and, by confusing its apparent intermediate target variable with its true policy instrument, actions taken to be stimulative can be contractionary and vice versa.     

Slowing monetary growth since 1984: A public choice explanation

Until about 1984, the U.S. monetary base typically grew at an accelerating rate. Since then, that acceleration has stopped. Modern evidence suggests that the Federal Reserve responds to political pressure. We present empirical evidence supporting the hypothesis that reduced monetary base growth reflects the fact that the political advantages of price inflation have been significantly reduced by the tax indexation provisions of the Economic Recovery Tax Act of 1981.     

So Hard to Say Goodbye? Turnover Intention among U.S. Federal Employees

Why do U.S. federal government employees choose to leave the federal service? By focusing on turnover intentions, this article develops propositions about why employees anticipate leaving their jobs along three dimensions: (1) demographic factors, (2) workplace satisfaction factors, and (3) organizational/relational factors. Two distinct measures of turnover intention are advanced that reflect those who intend to leave their agency for another position within the federal government and those who intend to leave the federal government for an outside position. The 2006 Federal Human Capital Survey is used to test the impacts of three clusters of independent variables on these measures of turnover intention. The findings suggest that overall job satisfaction and age affect turnover consistently. Practical recommendations are outlined for public managers seeking to boost employee retention.     

Chairman reappointments,presidential elections and policy actions of the federal reserve

A number of recent studies have analyzed whether there is a political influence on monetary policy, focusing primarily on whether monetary policy becomes easier just prior to elections. In addition to exploring whether there exists an election period cycle in monetary policy, this article explores the existence of another political influence on policy. Following up on some recent anecdotal evidence provided by John T. Woolley, this article explores whether incumbent FED chairmen have succeeded in influencing monetary policy in order to improve their reappointment chances. The analysis, which spans the administrations of seven U.S. presidents and four FED chairmen, finds no conclusive evidence that FED policy changes systematically either before elections or chairman reappointment dates. The analysis has implications for the issue of rules versus discretion in monetary policy.     

EXPLAINING FEDERAL RESERVE MONETARY POLICY

In an examination of Federal Funds rate monthly from 1954 to 2000, we compare a model using presidential party as a compositional variable with a model using presidential party as an interactive variable. Federal Reserve monetary policy was found responsive to the economy, to business elites, and to political circumstances. However, these influences had different patterns depending upon presidential party. The Federal Reserve appears to act neither randomly nor in isolation. It is responsive to the economy and interest groups but a President's partisan preference is particularly influential in decisions on monetary policy.     

COVID-19 and American Attitudes toward U.S.-China Disputes

The COVID-19 outbreak has fueled tension between the U.S. and China. Existing literature in international relations rarely focuses on virus outbreaks as factors affecting international relations between superpower countries, nor does research examine an outbreak’s potential influence on the public’s opinion about their country’s foreign policy. To bridge this research gap, this study explores the extent to which the American public may be prone to favor policies that “punish” China via existing U.S.-China disputes, such as the South China Sea dispute and the U.S.-China trade war. I conducted an online survey using Amazon’s Mechanical Turk and ran multinomial and ordered logit models to estimate the association between an individual’s preferred policies and the country or government an individual blame for the impact of the pandemic. After controlling several essential confounding factors, such as one’s levels of nationalism and hawkishness, I found strong evidence that there is a positive association between people’s attribution of blame to the Chinese government and the likelihood of supporting aggressive policy options in the two disputes with China. That is to say, U.S. citizens who believe that the Chinese government is solely culpable for the outbreak in the U.S., compared to those who think otherwise, are more likely to support hawkish policy options, such as confrontational military actions, economic sanctions, or higher tariff rates. The research provides a glimpse into where Americans may stand in these disputes with China and the potential development of U.S.-China relations in the post-pandemic era.

     

U.S. Government solar policy: Appropriate roles for nonfinancial incentives

During 1975–1980, U.S. solar policy emphasized financial incentives to potential purchasers as the primary means of stimulating the introduction and spread of residential solar heating systems. This article examines the importance of nonfinancial factors in decisions to purchase residential solar heating systems during these early stages of market penetration and discusses the implications these factors have for policy design. Drawing upon research on the diffusion of innovations, on the effectiveness of income tax credits for solar heating systems, and on solar energy system purchasing decisions themselves, the argument is developed that nonfinancial factors such as system reliability, warranty protection, environmental concerns, adequate information about system costs and performance, and confidence in system suppliers and installers are at least as important as initial system cost to early purchasers. These considerations were not reflected in U.S. solar policy to the extent warranted. As a result, that policy failed to promote the balanced development of all elements essential to a viable residential solar heating industry and probably failed to alter the intentions of many prospective solar system purchasers. The reasons U.S. policymakers were relatively insensitive to nonfinancial factors are discussed and an alternative strategy for increasing the rate of market penetration of residential solar heating systems is offered.A previous paper addressing this subject was prepared for the International Conference on Energy Use Management, Berlin, Federal Republic of Germany, 26–30 October 1981. That paper served as the basis for the present article. The author wishes to thank several reviewers for their helpful and constructive criticisms of earlier versions of this article.     

The ruthless Fed: A critique of the AST hypothesis

This paper examines the hypothesis that the Great Contraction was the result of rational rent-seeking by members of the Federal Reserve System. In contrast to the AST hypothesis, evidence on the share prices of member banks that survived the contraction suggests that the owners of these banks suffered an absolute decline in real wealth and a decline relative to a broad spectrum of other investment alternatives. Furthermore, monetary surprises had no statistically discernible effect on the share prices of these banks. This evidence conflicts with the notion that rational rent-seeking would lead the owners of member banks and their bureaucratic conspirators in the Federal Reserve System to unleash a policy with the goal of contracting the money supply by 35 percent.     

How Structural Variations in Collaborative Governance Networks Influence Advocacy Involvement and Outcomes

Collaborative governance is intended to solve complex problems and promote democratic outcomes by connecting ground‐level stakeholders with government. In order for these goals to be met, however, participants must have meaningful influence and opportunities for voice. Using national survey data from Continuums of Care (CoCs) mandated by the U.S. Department of Housing and Urban Development, this article investigates what structural characteristics of collaborative governance networks are related to promoting stakeholder inclusion and voice through policy advocacy involvement. Specifically, it investigates which network characteristics are associated with (1) the frequency of advocacy involvement by the network, (2) providers' engagement in and influence over that advocacy, and (3) the CoC having stronger relationships with policy makers. Findings show significant relationships between greater network capacity and network advocacy, and between network governance structure and provider engagement and influence in that advocacy. Networks have stronger relationships with policy makers when providers are more engaged, providers have more influence, network capacity is higher, and direct advocacy tactics are used.