Shadow Open Market Committee
The Shadow Open Market Committee (SOMC) is an independent, monetarist economic analysis committee founded in 1973 by Profs. Karl Brunner, from the University of Rochester, and Allan Meltzer, from Carnegie Mellon University, named after the Federal Open Market Committee (FOMC), of which it is often critical. Its members are drawn both from academia and the private sector.
The Committee was founded at a time when many monetarist economists believed the Federal Reserve—and the alleged dominance of new Keynesians within the Fed—had caused a recession by failing to keep money supply growth steady, and advocates that the Fed change its procedures to tighten its control of M-1. Throughout the 1970s and 1980s, the Committee's biannual studies consistently blamed the Fed for contributing to the inflation of that period. After 1982, the SOMC was critical of the Fed's return to short-term interest rate targeting, which it believed would further inflation.
Statistical analysis of the SOMC's policy recommendations and the FOMC's actions through 1995 indicated that the SOMC had little influence on FOMC directives.
Undersecretary for Monetary Affairs Beryl Sprinkel was a long-time member of the SOMC.
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