Monetary Policy

  • 08.07.13

    The Dual Mandate: Right Goals, Wrong Institution?

    In this article Dr. Stephanie Kelton looks at the "dual mandate." The Dual Mandate is a monetary policy imposed by Congress in 1913 which "charges the Federal Reserve with responsibility for achieving two broad macroeconomic goals: "maximum employment and stable prices."" She discusses the different points of view...

    In this article Dr. Stephanie Kelton looks at the "dual mandate." The Dual Mandate is a monetary policy imposed by Congress in 1913 which "charges the Federal Reserve with responsibility for achieving two broad macroeconomic goals: “maximum employment and stable prices.”"

    She discusses the different points of view that the different sides of the aisle take on the issue: "Much has been made (especially by those on the left) of the benefits of having a dual mandate." in contrast to the republicans "Not a single Republican expressed support for the dual mandate when the issue came up during a presidential debate on September 12, 2011. 

    Dr. Kelton then discusses some of the solutions put forward but offers her own take on the situation: "Nearly everyone seems to believe one or both of the following: (1) high levels of employment and low rates of inflation are worthwhile goals; and (2) the Fed is the right agency to deliver on these goals. I don’t dispute the former, but I often wonder about the latter."