David Zaring is assistant professor of legal studies at the Wharton School of Business at the University of Pennsylvania.
The release of the transcripts of the Federal Open Market Committee meetings held in the midst of the financial crisis has suggested Fed officials care about their critics, and worry about the international economy.
It also a chance to take stock of the way the discipline of “transcript-ology†is changing.
Transcripts of discussions among government decision makers - the tapes President Nixon made of his telephone calls, for example - used to be of particular interest to historians, who used qualitative techniques to make sense of a government decision-making process. They would read the transcripts and fit them into their narratives about government policy. Much of this work was not entirely dissimilar to journalism, although it might involve much more reference to historiography. Hence the idea that journalists might be writing the “first rough draft of history.â€
Recently, these sorts of look-backs have developed a quantitative element as well as a qualitative one. Economists have mined the Congressional Record to look for phrases associated with particular ideologies. Political scientists and legal scholars have done similar work on the Supreme Court. Jay Wexler counted the number of times that laughter broke out during Supreme Court oral arguments (Justice Antonin Scalia was, by far, the funniest justice, Mr. Wexler observed).
The numerical, rather than qualitative, approach has been applied to the F.O.M.C. as well, where transcripts and other written materials have been scrutinized to see how Fed officials, who are relatively slow to dissent, at least compared with judges and members of other American agencies, hash out their differences.
Quantitative reviews of transcripts promise to open a new trove of data to Fed watchers. For example, the two decades’ worth of F.O.M.C. meeting transcripts during the years that Alan Greenspan was chairman of the Federal Reserve are available on the agency’s website. With script-reading computer programs, one can tell a story about what happened in the F.O.M.C. meetings during Mr. Greenspan’s tenure, without going through the actual trouble of reading the records.
I know because I have done it. I can report that the F.O.M.C. during the Greenspan era settled into a fairly consistent pattern, where the committee members would first discuss the state of the economy, in seriatim, after receiving reports from the Fed staff. Next, the committee members would discuss whether the federal funds rate ought to be changed in light of their conclusions about the economy. Usually, Mr. Greenspan would begin the discussions of each topic.
Simple quantitative data from those meetings suggests an increasing commitment to bureaucratic imperatives of order, consideration and formality. I can tell you that meetings lengthened as the Greenspan era wore on. They lasted for roughly 50 transcript pages until the mid 1990s; from 2001 to 2006, the average meeting required closer to 100 transcript pages to record.
More people came, as well. During the early years, the average number of attendees of the Greenspan era was less than 50, but after the halfway point in his leadership, the average nosed above that mark.
For what it is worth, the mood lightened as the chairman aged, although the F.O.M.C. certainly went through turbulent times during both the beginning and the end of Mr. Greenspan’s tenure. Meeting transcribers recorded laughter on a per-transcript-page basis increasing from an average of less than 20 percent from 1988 to 1992 to more than 20 percent from 2001 to 2006. In a few years, we will be able to make comparable statements about the F.O.M.C. when Ben S. Bernanke was the Fed chairman. Mr. Greenspan used wit far more than any other single Fed official (although he spoke far more at F.O.M.C. meetings than the others did) - laughter ensued after something he said 556 times over the course of his tenure.
With content analysis software programs and the migration of transcripts online, this sort of counting has only gotten more technical and elaborate; one can now compare quantitative expressions of what happened during the meetings with the decisions made at the conclusion of those meetings, and look for statistically significant correlations.
It will be interesting to see how this sort of analysis is received, however. Many social scientists are suspicious of the idea that we can learn much about the government by looking at what its leaders say to one another. Saying is one thing and doing is another, as anyone who has pored over the Congressional Record would be the first to tell you.
There aren’t many government committees more important than the F.O.M.C, though, and a lot of people in the finance industry would be willing to look at any source of information that might help them predict what the committee might do.
If “transcript-ology†in either its qualitative or its quantitative form proves to be of interest to these people, or to those in the ivory tower, it will suggest that some think that specific meetings and decisions are worth considering even apart from the general sweep of the impersonal market, social and political forces that those meetings are trying to control.
