Political Selection of Federal Reserve Bank Cities

  • Jac C. Heckelman
  • John H. Wood
Part of the Studies in Public Choice book series (SIPC, volume 35)


The Federal Reserve Act (1913) established the Reserve Board Organization Committee (RBOC) to determine the number and location of Federal Reserve districts and Reserve banks. Some scholars argue that the decisions were politically motivated but direct econometric evidence is lacking. A regression model utilizing solely political variables correctly predicts 11 of the 12 selected cities; the exception being Cleveland’s selection over Cincinnati. Our results present direct evidence of the importance of political determinants for RBOC selection.


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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Wake Forest UniversityWinston-SalemUSA

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