Appointing Central Bankers: The Politics of Monetary Policy in the United States and the European Monetary Union

This book examines monetary policy by focusing on how the President and the Senate influence monetary policy by appointing Fed members. The book attempts to answer three questions about the appointment process and its effects. First, do politicians influence monetary policy via Fed appointments? Second, who influences the process - the President alone or both the President and the Senate? Third, what explains the structure of the Fed appointment process? The test models show that the President alone, both the President and Senate, or neither, may influence monetary policy with Fed appointments. The structure of the process reflects political battles between the Democrats and Republicans regarding the centralization of authority to set monetary policy within the Federal Reserve System. It extends the analysis of the Fed to the European Central Bank and shows that the Fed process guarantees a process which is more representative of society compared to the ECB process.