Defending the presence of bankers on the boards of directors of the Federal Reserve Banks, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond argued: “This hybrid governance model has come to play an important role in the independence of monetary policy… . Political independence allows monetary policy to place greater weight on the long-term benefits of low and stable inflation.”
a. What does Lacker mean by a “hybrid governance model”?
b. Why might a politically independent Fed give greater weight to low and stable inflation than Congress and the president would if they controlled monetary policy directly?