Congressional policy preferences and U.S. monetary policy

This paper shows that the evidence of congressional impotence in influencing U.S. monetary policy presented in Chopin et al. (1996) is robust to inclusion of a dummy variable for the tenure of House Banking Committee Chairman Wright Patman. This result is in contrast to the assertion of Grier (1996). Further, we show that specification problems of models of congressional influence over a sample period that extends beyond the mid-1980s can be the result of omitted variable bias. When macroeconomic variables, including oil price shocks, are included in the model, our results continue to hold. Contrasting our results with Grier's indicates that the evidence concerning congressional influence is sensitive to the measure of congressional preferences.