Do Federal Reserve Bank Presidents Pursue Regional or National Interests?
Because JDA has other things to do (namely stalking the Capital Wasteland for mutants, picketing the Fed Board of Governors and entertaining at home, naturally), Bernd Hayo and Matthias Neuenkirch (Philipps-University Marburg) have beat me to the paper Do Federal Reserve Bank Presidents Pursue Regional or National Interests? New Evidence Based on Speeches.
Obviously Federal Reserve presidents are supposed to take what business interests in their district offer and use that to craft, nay, hone perfect policy and opinion based on that input. Some Fedheads are better than others at shlepping Main Street to the 27-foot, two ton mahogany table at which the FOMC meets but in the interest of not outing central bankers bad at their jobs, we won't name names. Hayo and Neuenkirch didn't need to name names either, though it's pretty easy to figure out who is who based on their findings:
In this paper, we analyze the determinants of speeches by Federal Reserve (Fed) officials over the period January 1998 to September 2009. Econometrically, we use a probit model with regional and national macroeconomic variables to explain the subjectively coded content of these speeches. Our results are, first, that Fed Governors and presidents follow a Taylor rule when expressing their opinions: a rise in expected inflation (unemployment) makes a hawkish speech more (less) likely. Second, the content of speeches by Fed presidents is affected by both regional and national macroeconomic variables. Third, speeches by nonvoting presidents are more focused on regional economic development than are those by voting presidents. Finally, voting presidents and Governors are less backward-looking in their wording than are nonvoting presidents.What I'd love to see is an abstract on former presidents and Governors' backward-looking tendencies compared to current presidents and Governors based on teevee appearances, speeches and possibly papers that they've written for a payoff that they didn't actually disclose. Not that I have any idea where they could find a case study like that.