The Fed, The Financial Crisis and Monetary History: An Interview with Dr. Allan Meltzer

HOFFMEISTER: Dr. Meltzer, you are of course one of the leading economists of the world and the expert on the history of the Federal Reserve. When did you first become interested in monetary policy?

DR. MELTZER: I wrote my thesis on French inflation so that was the beginning, but I didn’t have any career plan to pursue either that or financial inflation. One day, I was at work, and then I got a call. There had been a study of something called Employment, Growth and Price Levels in 1959. Professor Otto Eckstein from Harvard was the head of that study and they did…put out a lot of pamphlets. Among the things that they collected was a bunch of balance sheets, income statements, transactions from the dealer market for government securities. The caller asked me whether I’d like to work on a study of marketing government securities and write a report for Congress. I didn’t have the slightest idea what the dealer market in government securities was. The next man that came into my office is one of my colleagues a guy named, Gert Von Der Linde. And I said to him, “Do you know what the dealer market in government securities is?” He said, “Yes. That’s where they do all the market operations.” “Oh,” I said, “that’s interesting. Do you want to do this thing?” So we wrote a report for I believe the Joint Economic Committee for Congressman Patman, who was at that time the vice chairman or the chairman of the Joint Economic Committee and that was my beginning, but that was only a small beginning.

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