The Fed as a moral enterprise - a framework for decision-making
Central bankers are currently rethinking the frameworks of monetary policy in light of the extreme disruptions and unprecedented policies of the Global Financial Crisis. The paper examines whether a rule based approach that incorporates moral considerations beyond economic utilitarianism could provide a more fair, effective and stable monetary system. It demonstrates that criticisms of Fed policies raise moral questions that reflect a widely held normative framework in the monetary arena. The paper abstracts from the criticisms and elaborates a pluralistic framework based in the work of moral philosopher W.D. Ross consisting of the basic duties of non-harm, beneficence, fidelity, justice, and reparation. It outlines a decision system that relies on moral intuition and strict attention to the facts to balance competing considerations and derive the duty to be followed in the particular circumstance.
Philosophy Ethics Economics Monetary policy Fed, W.D. Ross