The President Versus the Senate : Appointments in the American System of Separated Powers and the Federal Reserve

For politicians, appointments are an instrument of policy influence. By installing their representatives in an institution, politicians can count on policy influence for the duration of their appointees' terms. Given the stakes, the occasional controversy regarding nominees is understandable. On the whole, however, nominations are not controversial; in fact, Senate confirmation votes are often unanimous. Nevertheless, the Senate can have substantial influence in the appointment process. Using a formal model, this paper examines how the President and Senate strategically bargain with one another within the confines of the Fed appointment process to influence monetary policy. With a new way to estimate monetary policy preferences, the paper shows empirically that policy influence occurs via appointments