Past US presidents’ Fed pressure raised inflation – NBER paper

Nixon-era evidence points to major impact on price level from “political pressure shocks”

Arthur Burns
Arthur Burns is widely thought to have given in to pressure from Richard Nixon to ease monetary policy

Political pressure on the Federal Reserve tends to be more inflationary than standard monetary easing, research published by the US National Bureau of Economic Research finds.

Author Thomas Drechsel develops an approach to estimating “political pressure shocks” based on records of meetings between Fed chairs and US presidents. He uses transcripts from 1933 until 2016.

In his working paper, Drechsel focuses on the presidency of Richard Nixon as an identification strategy, as it was a period when

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