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Why the Federal Reserve Is More Politically Constrained Than You Think

Published by USC Bedrosian Center on

by Anthony Orlando

We’ve been having a mistaken debate, or so it would seem based on the new book The Myth of Independence. The Federal Reserve, the nation’s central bank and most influential economic regulator, isn’t as independent as critics like Rand Paul and Bernie Sanders suggest. Congress created it, and Congress continues to shape it to the people’s will. This new perspective might just change your expectations about Fed policy and your appreciation for their delicate strategic work.

In this episode, Sarah Binder discusses the historical research that led to this new thesis and helps us appreciate the interplay between two of America’s most important political institutions.

Prof. Binder is a professor of political science at George Washington University and a senior fellow in governance studies at the Brookings Institution. She is co-author with Mark Spindel of the new book The Myth of Independence: How Congress Governs the Federal Reserve.

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Related Reading

“Independence and Accountability: Congress and the Fed in a Polarized Era” by Sarah A. Binder & Mark Spindel

“The Federal Reserve as a ‘Political’ Institution” by Sarah Binder

“The Fed Claims to Be Independent. That’s Mostly a Myth.” by Sarah Binder & Mark Spindel

“How Congress Governs the Federal Reserve” by Mark Spindel & Sarah Binder

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