from independent review article go through emre tuwen:
…Research and presentations by Fed economists increasingly focus on climate change, gender, race, and inequality (Toomey 2021). Regional Federal Reserve Banks and Federal Reserve Boards hold numerous seminars and conferences, and publish research papers on political topics.
I wonder how bad this statement is. Apparently, ex-senator Toomey was enraged. The Federal Reserve is responsible for carrying out monetary policy, but is also partly responsible for the regulation of the financial system. In my view, climate change (increased incidence of climate events, resulting in economic losses and challenges for insurance companies) will be a no-brainer. Inequality affects the transmission of monetary policy (think wealth inequality, or access to financial services like banking). What about gender and race? We know that pay varies by gender and race and cannot be fully explained by other covariates like education; we should not be interested in whether markets work well in order to know whether monetary policy works effectively across different demographic groups. At the very least, it’s interesting that – for example – women generally rate inflation higher than men. I don’t think investigating such phenomena is a dangerous thing to do.
Another point Dr. Tuvven makes is that the Fed is skewed toward Democrats, even more so than the average economics major (and I’m talking about the average economist, not leadership like board members). Of course I’d like to know how that compares to economics majors in general – of course that would have to depend on the “economics major” cutoff; Know what the confidence intervals are for the general occupation and Fed headline ratios, and see if the confidence intervals overlap). But I also expect Fed economists to lean more toward Democrats than Republicans, and more so over time. After all, Republicans have shed many of their past orthodoxy, such as balanced budgets, central bank independence, liberal trade policies, and the Trump-era belief in data and expertise. In that environment, I would expect the Republicans to withdraw, for example, Qing Ge (2020) (Although as I emphasized, not conservative economic thinking).
Anyway, here’s what Kuvvet compiled about the Federal Reserve Board and seven of the 12 regional Fed banks (San Francisco, Dallas, Philadelphia, Boston, Atlanta, New York, Cleveland; missing St. Louis, Kansas City, Minneapolis). Data, Richmond and Chicago).
source: The Force (2022),Table 2.
I must say, looking at Kuvvet’s Table 2 and the derived graph, it seems to me that there is some uncertainty about partisanship. Looking at the council in Washington, D.C., you can see that the largest category is “Unregistered.” That’s true for the full board and seven of the 12 regional Fed banks. If there is political homogeneity, it is difficult for me to see it in these statistics reported.
From personal experience, I also have a hard time seeing homogeneity over time. Thirty-two years ago, I interviewed the Board of Directors and two Federal Reserve Banks. It’s not a very large sample, but at least I have one. I’m struck by the homogeneity that exists, at least when it comes to economic debate and worldview (obviously, I’ve never asked about politics, so know nothing about it). It’s also very racially and ethnically homogeneous.I’m having a hard time seeing how homogeneous Increase During the 32 years in between.
Speaking of partisanship and worldview, ever wondered who came up with the staggered contracts that are the key to new Keynesian economics? One of them was John Taylor. Ever wonder who uses menu costs as an integral part of New Keynesian economics? Greg Mankiw.
