Congressional oversight committee influence on U.S. monetary policy revisited

Grier (1991) shows that monetary policy is influenced by Congress in that increases in the liberality of the Senate Banking Committee leadership are significantly positively correlated with monetary base growth. Chopin, Cole, and Ellis (1996) claim that the House leadership statistically dominates the Senate leadership for predicting money growth, but that the direction of the effect is perverse: a more liberal House leadership is associated with a lower rate of base growth. In this paper, I show that Chopin, Cole, and Ellis's claims are unfounded. Properly measured, both House and Senate leadership have a significant positive effect on base growth over Grier's (1991) original sample. In later periods, money growth regressions are not sufficiently stable to support hypothesis tests.