Question

How independent is the Federal Reserve Bank? Should it be more or less independent than it is? Make the case both for and against independence.

Answer 1

Federal reserve is particularly independent however partially because it does have to coordinate and collaborative with Congress and is accountable to public.

The current level of independence is best regarded and is perfect. However some exceptional more powers should be alloted by Government for Fiscal policies as well.

If Fed is given high level of independence then there can be autocratic policies and can become very stringent.

However if not given then economy can be highly volatile because major economic imbalance and excessive debt.

answered by: anonymous