The idea is that when FOMC members rotate in and out, the mix of hawks and doves in the FOMC is affected for reasons unrelated to the macroeconomy. [...] 2 For example, Abrams (2006) documents the influence of the Nixon administration on the FOMC in the period before the 1972 election. [...] 3 The seven members of the Board of Governors and the president of the Federal Reserve Bank of New York are permanent voters in the FOMC. [...] We assess the effects of US government spending shocks on the economy accounting for the hawkishness of the FOMC. [...] In our regression model, macroeconomic variables such as real GDP, government spending, the federal funds rate or inflation expectations may respond to the spending shock and the interaction between the spending shock and the hawk-dove balance in the FOMC.
Authors
- Pages
- 5
- Published in
- Austria
