Policy to Be Worthy of Pursuit

In a recent paper, Mercatus Center scholars Scott Sumner and Chad Reese addressed the need to demystify the oversight of monetary policy. They also suggested that arguments centered on the nuances of the Fed Oversight Reform and Modernization Act (FORM), which was passed recently by the House, ignore the bigger picture: the bill could allow the Fed and the Congress, at long last, to speak the same language.

The authors noted that the FORM bill would require the Fed to develop a standard methodology for making monetary policy decisions, which they argued would allow Congress to understand how the Fed thinks that its actions will help achieve its goals. Regardless of arguments about the merits and drawbacks of the FORM bill, they concluded, efforts to bridge the communication gap between different policymaking institutions are worth pursuing.