Inside the Fed: Monetary Policy and Its Management, Martin Through Greenspan to Bernanke

Stephen Axilrod is the ultimate Federal Reserve insider. He worked at theFed's Board of Governors for over thirty years and after that in private markets andas a consultant on monetary policy. With Inside the Fed, he offers his uniqueperspective on the inner workings of the Federal Reserve System during the lastfifty years -- writing about personalities as much as policy -- based on hisknowledge and observations of every Fed chairman since 1951.Axilrod's discussionfocuses on how the personalities of the various chairmen affected their capacity forleadership. He describes, for example, Arthur Burns's response to political pressurefrom the Nixon White House and Paul Volcker's radical shift to an anti-inflationarypolicy at the end of the 1970s -- a transition in which Axilrod himself played acrucial role. As for the Greenspan years, Axilrod points to the unintended effectsof the Fed's newfound "garrulousness" (the plethora of announcements and hints aboutpolicy intentions) -- one of which was the Fed's loss of credibility in theaftermath of the chairman's 1996 comment about "irrational exuberance." And Axilrodincisively outlines the problems -- including the subprime mess -- inherited fromGreenspan by the current chairman, Ben Bernanke. Great leadership in monetarypolicy, Axilrod says, is determined not by pure economic sophistication but by theability to push through political and social barriers to achieve a paradigm shift inpolicy -- and by the courage and bureaucratic moxie to pull it off.

Review :
"An intimate account of the Fed's depressing decline in the seventies and dramatic comeback in the Volcker years when the central bank triumphed over the biggest threat to the U.S. economy since the Great Depression. Now that the old enemy, stagflation, is stirring once more, the lessons Stephen Axilrod draws from past battles couldn't be timelier." --Sylvia Nasar, author of "A Beautiful Mind" "Informative and insightful, this view of the inner workings of the Fed will appeal to anyone with an interest in economics or curious about the organization's recent progression."-- "Publishers Weekly" "Stephen Axilrod's aptly titled book is, indeed, the ultimate Federal Reserve insider's account. Leaving aside only the chairmen under whom he served, no one played a greater role in shaping U.S. monetary policy during these turbulent years or had a closer view of how the policy was made. And, true to the author, Axilrod's book is full of plain common sense about central banking, economic policy, and much beyond. No one seriously interested in American monetary policy in the post-World War II era can ignore what Axilrod recounts here."--Benjamin M. Friedman, William Joseph Maier Professor of Political Economy, Harvard University "Informative and insightful, this view of the inner workings of the Fedwill appeal to anyone with an interest in economics or curious about theorganization's recent progression." -- "PublishersWeekly" "This book is truly from 'inside the Fed'...Axilrod's accounts ofpolicymaking as seen from inside the Fed are interesting and informative." --John H. Wood, "EH.Net"