The Regional Representation of Federal Reserve Bank Presidents.

Abstract

Recent litigation has questioned the constitutionality of having Federal Reserve Bank presidents serve on the Federal Open Market Committee. Inherent, but undocumented, in these lawsuits is the belief that district bank presidents vote differently than Federal Reserve Governors at Federal Open Market Committee meetings. This paper analyzes the voting behavior of Federal Reserve Bank presidents and uncovers a regional bias in their monetary policy preferences. Presidents representing regions with higher unemployment rates or with larger percentages of democratic voters tend to vote for more expansionary monetary policy. This study provides yet another clue to the monetary policymaking behavior of Federal Reserve officials. Copyright 1992 by Ohio State University Press.