The Policy Preferences of FOMC Members as Revealed by Dissenting Votes: Comment

Abstract

The purposes of this comment are to present evidence that casts doubt on several of the conclusions of Susan Belden's recent paper in this journal (1989) and to suggest directions for future research in this area. To begin, there is skepticism that dissenting votes, at least as Belden measures them, can be unbiased indicators of policy preferences. In addition, Belden partially recognizes but does not fully specify three influences on Federal Open Market Gommittee (FOMC) member voting that are prominently featured in the literature. These influences are (1) FOMC member training background and career experience, (2) state-of-the-economy measures, and (3) partisanship measures. Each of these factors alone may help to explain one of Belden's three major findings. First, the training backgrounds and career experiences of bank presidents may help to explain Belden's affirmation of their penchant to dissent from FOMC directives on the side of monetary tightness. Second, the state of the economy may help to explain Belden's finding of a decline in dissent voting when Arthur Burns was Chairman of the Federal Reserve. Third, differences between the party of the President and the partisan composition of the Board of Governors may help to explain Belden's discovery of shifts in ease and tightness dissent voting behavior under different chairmen. Since this comment will indicate how these influences qualify Belden's Elndings, it will at the same time suggest fruitful directions for the research agenda in this area.

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