Inflation as Policy Instrument and Objective in FOMC Transcripts, 1976-2009

• In Event: 118 - Section on Economic Sociology Refereed Roundtable Session and Business Meeting
  In Refereed Roundtable 60min: Table 01. Central Banking

Abstract

Past literature has argued that beginning in the 1970s inflation has become increasingly important in economic policy for western nations. Despite this, few have looked at how economic elites understand or use the concept of inflation. This project analyzes the meeting notes from the Federal Open Market Committee (FOMC) from 1976 to 2009 to explore how members and staff of the FOMC use and understand inflation. Using a structured topic model to reflect the sociological understanding of meaning, I find that topics dealing with inflation have increased in prevalence over time. Inflation is used in two main contexts by the FOMC: as policy instrument and policy objective. While the latter has been a focus of previous literature, I argue that the increase use of inflation as policy instrument has been overlooked.

Author

• Jean Nava, Princeton