NEW YORK, SEPT. 24 -- The Federal Reserve System, the nation's central bank, is too secretive and should publicly announce established goals for inflation and unemployment levels, a study released today said.
The study, published by the Salomon Brothers Center for the Study of Financial Institutions at the New York University Schools of Business, called upon the Federal Reserve to improve its communications with other governmental bodies and the public.
"The more information the Fed does release, the less is its mystique, the less its autonomy and independence," said the study's author, Thomas Mayer, a professor of economics at the University of California, Davis.
"More information on the Fed's targets and instruments would allow the public to monitor the Fed's actions better," Mayer concluded in the study.
In his study, Mayer said that the central bank is "needlessly vague" with the information it releases. He argued that the Fed's regular announcements about targeted growth rates "mean little" because it is not clear what "the Fed really means when it sets a target."
The study recommends that the Fed return to its former policy of keeping minutes of meetings of the Federal Open Market Committee, which decides on its monetary policy.
Mayer said the Fed's restricted flow of information allows the agency an opportunity to change failed monetary policy without public scrutiny and minimizes potential conflicts with the president.
Earlier this week, former Federal Reserve Board Chairman Paul A. Volcker said he would make only "small changes" in the way the Fed operates and supported its overall structure and operation.
Volcker, in New York Wednesday to address the American Institute of Certified Public Accountants, left the Fed in August and was replaced by Alan Greenspan