More data, less gumption

摘要

The Federal Reserve is "the most transparent central bank to my knowledge in the world," claims its chairwoman, Janet Yellen. Transparency is a commonly prescribed remedy for all manner of governmental failings. But is it always beneficial? A recent paper suggests that greater openness may turn central bankers into politicians, who show off their knowledge of economic data but are timid about recommending policy. The paper uses a natural experiment involving meetings of the Federal Open Markets Committee (fomc), the panel that sets interest rates. In 1993 the Fed, pressed by Congress to make its proceedings less opaque, not only promised to publish transcripts of the fomc's future meetings, but also opened up its archive. Transcripts of earlier meetings had never been intended for public release; members of the fomc were not even aware that such records had been retained.