Studies from Texas Technical University Further Understanding of Investment (Mission Creep At the Federal Reserve): Investment

2024 OCT 21 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Investigators discuss new findings in Investment. According to news reporting originating in Lubbock, Texas, by NewsRx journalists, research stated, “Since the 2008 financial crisis, the Federal Reserve has expanded its objectives beyond the traditional scope of monetary policy. It directly allocates credit, incorporates inequality considerations into its employment goals, and seems prepared to involve itself in climate change policy.”

The news reporters obtained a quote from the research from Texas Technical University, “In response to these developments, we make three elementary but often overlooked points. First, the Fed has engaged in mission creep since its earliest days. Second, mission creep has intensified since the financial crisis due to increases in both the supply of and demand for central bank activism. We argue that the floor system and accompanying unconventional monetary policies reduced the cost of mission creep. Third, we explain the likely negative consequences of mission creep. These have three causes: (1) mission creep increases the scope of credible commitment problems, (2) novel policies suffer from major knowledge problems, and (3) since those policies make the Fed’s activities harder to monitor, it becomes costlier to discipline the central bank.”

According to the news reporters, the research concluded: “The results are a greater scope for regulatory capture, bureaucratic incompetence, and rent-seeking.”

This research has been peer-reviewed.

For more information on this research see: Mission Creep At the Federal Reserve. Southern Economic Journal, 2024. Southern Economic Journal can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA.

Our news correspondents report that additional information may be obtained by contacting Alexander William Salter, Texas Technical University, Rawls College of Business, Lubbock, TX 79409, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1002/soej.12738. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

(Our reports deliver fact-based news of research and discoveries from around the world.)