Wednesday, September 30, 2009

Shadow Open Market Committee meets today - position papers available

The second semiannual meeting of the revamped Shadow Open Market Committee (SOMC) will be meeting later today, Wednesday afternoon, September 30, 2009 at the Cato Institute in Washington, D.C. The focus for this meeting will be "Exit Policies for Sound Central Banking." Position papers are now available. In other words, how and when should the Federal Reserve unwind all of the current monetary stimulus that it has pumped into the financial system. The symposium will run from 12:30 p.m. to 5:15 p.m. with a reception to follow. Registration and check in is at noon. Advance registration is advised since space is limited, but you can watch the event live from the symposium page.

Position papers are now available.

The quick summary of the symposium is:

The SOMC would like to invite you to a September 30, 2009, symposium on appropriate exit policies for the Federal Reserve, European Central Bank' and other leading central banks. This meeting will begin with a panel discussion on pressing issues facing global monetary policies, featuring Donald Kohn, vice chairman of the Federal Reserve and Athanasios Orphanides, Member of the Governing Council of the European Central Bank. A guest lecture will be presented by former SOMC member William Poole. Position papers will be presented by SOMC members Charles Calomiris, Michael Bordo, Bennett McCallum, Marvin Goodfriend, Gregory Hess, Mickey Levy and Anna Schwartz. The audience will be encouraged to participate in the discussions.

The papers to be presented by the committee members are:

Michael Bordo, The Fed's Monetary Policy during the 1930s: A Critical Evaluation

Charles Calomiris, Reassessing the Role of the Fed: Grappling with the Dual Mandate and More?

Marvin Goodfriend and Bennett McCallum, Exiting Credit Policy to Preserve Sound Monetary Policy

Gregory Hess, Fannie and Freddie: The Houseguests that Just Won't Leave

Mickey Levy, Macroeconomic Policies and the Economy

Anna Schwartz, Restoring Monetary Sensibility

Some of those position papers are already available online, either through the linked titles above or on the SOMC web page at Claremount McKenna College.

Bill Poole's lecture is entitled "Exit Policies from the Financial Crisis -- To What?". Currently a senior fellow at Cato, Bill was president of the Federal Reserve Bank of St. Louis. Before that as a Professor of Economics at Brown University he had been a member of the original Shadow Open Market Committee.

"The Shadow" is a small group of economists who meet periodically to present papers on and discuss various aspects of the economy and monetary policy that are relevant to the Federal Reserve in general and the Federal Open Market Committee in particular.

The goal of the SOMC, as stated on their old web site, was that:

The Committee's deliberations are intended to improve policy discussions among policy makers, journalists and the general public with the hope that wiser policy decisions will result.

The web site has not been updated since May 2006, so the SOMC "charter" may have changed, but I suspect not.

As the old web site says, "The SOMC is an independent organization whose members are drawn from academic institutions and private organizations." The SOMC is mostly academic, and certainly nobody currently in the government, although members of the SOMC have gone on to join the Federal Reserve and former Federal Reserve officials and employees have joined the SOMC after leaving government employment.

Previous members continuing on the "new" SOMC are Professor Gregory Hess of Claremont McKenna College, Mickey Levy of Bank of America, Professor Bennett McCallum of Carnegie Mellon University, and Anna Schwartz of NBER.

The new SOMC members are Professor Michael Bordo of Rutgers University, Professor Charles Calomiris of Columbia University, and Professor Marvin Goodfriend of Carnegie Mellon University.

There is a new web page for the committee at Claremont McKenna College, but it has not yet been updated for the upcoming meeting. The papers from the April meeting are still there for download.

I have been attending the SOMC as an observer since... longer than I can remember... since about 2000.

The first SOMC meeting was back in September 1973. The SOMC was founded by Prof. Karl Brunner of the University of Rochester and Prof. Allan Meltzer of Carnegie-Mellon University.

For those of us into economics, finance, monetary policy, and fiscal policy, it will be an exciting afternoon.

It is always interesting to listen to the form of questions asked by "the media."

See the Cato web site for details on attending.

-- Jack Krupansky


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