Federal Reserve Policy-making: A Study in Government Economic Policy Formation. G. L. Bach

Over recent years there has been increasing criticism of what may be called ‘conventional’ economic policy-making The methods of forecasting and analysis used at the National Institute and elsewhere are at the centre of this type type of policy formation, and, although there have certainly been forecasting errors, the conclusion of this article is that nothing better has been proposed. This is certainly true of the New Cambridge view of the balance of payments which always had many theoretical difficulties, but which has now, it is demonstrated, also fallen down empirically.The school which is here labelled Monetarist is defined rather widely and probably includes somewhat divergent strains of thinking. They have in common however that they reject the cost-push explanation of inflation in favour of a monetary/excess demand theory. Attention is restricted to those who have commented on the UK situation. It is the central contention of this section of the article that the case is not proven by the sorts of ‘evidence’ which tend to be adduced. It is much more likely that the relatively painless monetarist cure for inflation is not a real option at all, but a mirage resulting from excessive concentration on statistical correlations of quarterly post-war data. A much broader view considers the important implications of the shift from the pre-war world to the ‘full employment welfare state’.

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The Nixon-Kissinger Foreign Policy System and U.S.-European Relations: Patterns of Policy Making

World Politics ◽

10.2307/2010028 ◽

1975 ◽

Vol 28 (1) ◽

pp. 1-43 ◽

Cited By ~ 19

Author(s):

Wilfrid L. Kohl

Keyword(s):

Decision Making ◽

Economic Policy ◽

Foreign Policy ◽

Policy Making ◽

Process Model ◽

American Foreign Policy ◽

Policy Formation ◽

Policy Outcomes ◽

Organizational Process ◽

Royal Court

No single model adequately explains the American foreign policy-making process. At least six models are required, singly or in some combination, to understand recent American foreign policy formation under the Nixon Administration. The six models are: democratic politics, organizational process/bureaucratic politics, the royal-court model, multiple advocacy, groupthink, and shared images or mind-sets. After a review of the rules of the foreign policy game in Washington and the main elements of the Nixon-Kissinger National Security Council system, the article seeks to apply the models to a number of cases in recent American policy making toward Europe. U.S.-Soviet relations, the “Year of Europe,” and Nixon's New Economic Policy of August 1971 are examined as cases of royal-court decision making. A second category of cases exhibits mixed patterns of decision making: SALT, the Berlin negotiations, U.S. troops in Europe, MBFR, and U.S. trade policy. Bureaucratic variables alone explained policy outcomes in international economic policy making in the autumn of 1971, and an organizational process model was found to be dominant generally in the formation of recent international monetary policy, led by the Treasury Department. The conclusion considers the relationships between the models and certain kinds of policies.

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