Regional Dissent: Do Local Economic Conditions Influence FOMC Votes?

Bobrov, Anton; Kamdar, Rupal; Ulate, Mauricio

doi:10.1257/aeri.20240184

Abstract

U.S. monetary-policy decisions are made by the 12 voting members of the FOMC. Seven of these members inherently represent national-level interests. The remaining members, a rotating group of presidents from the 12 Federal Reserve districts, come instead from sub-national jurisdictions. Does this structure have implications for the monetary policy-making process? We provide novel evidence that regional economic conditions influence the voting behavior of district presidents. Specifically, a regional unemployment rate that is one-percentage-point higher than the national level is associated with an approximately nine-percentage-points higher probability of dissenting in favor of looser policy at the FOMC.

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