the humphrey hawkins full employment and balanced growth act sought to modernize and to make a little more ambitious and a little clearer the objective particularly with respect to employment. and it also ended up clarifying what was meant by purchasing power. that's where the reasonable price stability came into the preamble. so it was a way of broadly specifying economic policy objectives for the entire government. but also with respect to the federal reserve, this was the moment we had set up through in 1975 a process of dialogue with the federal reserve regular oversight hearings which goes on and the humphrey hawkins act federal reserve provisions placed those into law and set a regular procedure. that included of course, as professor taylor has said goals for the growth of various monetary aggregates, which over time has dr. rivlin has just said became less useful because the relationship between those objectives or those statistics and anything you ultimately cared about became much noisier and less reliable. >> thank you for that response. dr. kline, being from missouri, my ho

reasonable price stability, the language in the humphrey hawkins preamble, as i recall, is an important objective, but so is full or maximum employment. i think congress would be well-advised not to commit to either one at the sacrifice of the other. i do urge congress to continue to pursue the goals of oversight, accountability and probe deeply what the federal reserve is doing but within the framework of present law. thank you very much. >> i thank you now. recognize dr. rivlin. >> thank you, mr. chairman. i'm happy to have this opportunity to testify before this subcommittee, as you consider the diverse set of bills about the federal reserve. i will concentrate my remarks on the dual mandate. i believe that the dual mandate has served the united states well, and that it would be a mistake to restrict the fed's policy actions to fostering stable prices alone. i'd like to make clear at the outset, mr. chairman, i believe in a strong independent central bank. without a strong independent central bank, functioning to mitigate academic and financial instability, i believe the united state

former member of the staff of this committee and that i served on the team that drafted the humphrey/hawkins full employment and balanced growth act. i wish to speak mainly today in defense of the dual mandate, the plural mandate, the flexible and practical language of present law. that law was drafted at a time of acute theoretical conflict in economics and on the staff. i was a young full employment liberal, one of our colleagues, james pierce, former federal reserve research director, was a mainstream keynesian at the time. who our colleagues were chicago monitorists trained by milton friedman. we promised on lang that gave clear reporting transparency and accountability requirements to the federal reserve in the presence of ultimate objectives but that did not impose anyone's theoretical views. had we done so, i fear the oversight process would have failed long ago, perhaps when man stream economics adopted the concept of a natural rate of unemployment in the early 1980s, perhaps when classical m monitorism fell apart. being flexible the process has survived for over 35 years even though

and the imbalance grows since 1978 better known as the humphrey-hawkins act, set four benchmarks for economy. full implement, price stability and balance of trade and money. of full and balanced growth act mandated board and the federal reserve submit reports to congress on the status of the u.s. economy and the nation's financial welfare. the humphrey-hawkins charges the federal reserve with a dual mandate maintaining stable prices and full employment. currently the unemployment rate is 8.1%. since president obama took office in january of 2009 the unemployment rate has gone from 7.8% around moderation to 10% as the impact of the financial crisis spread. to 8.1% today. i do believe the u.s. economy is heading in the right direction with the proper nudge it can probably improve even more. as of march the consumer price index was 2.7%. over the past year it declined from february of this year, 2.9%. during the same period the energy index has risen 4.6% and it has increased 3.3%. both increases are smaller than west month. in contrast the change in the index for all items, less food a

the humphrey-hawkins charges charges a dual mandate both maintaining stable prices and full employment. currently the unemployment rate is 8.1%. since president obama took office in january of 09, the unemployment rate has gone from 7.8% to around 10% as the impact of financial crisis spreads. i do believe the u.s. economy is heading in the right direction. as of march, at the consumer price index was 2.7 and%. over the past year a decline of 2.9 term. during the same time, energy has risen 4.6%. the food index has increased 3.3%. both increases are smaller than last month. the index for all items means less food and energy, which was 2.0% in february. all of these factors play a very important role in getting america back to economic growth and prosperity. i look forward to the witness's testimony. i will yield back. >> thank you. i yield five minutes to dr. heyward. >> thank you. it is with great pleasure that i anticipate the testimony. we have a great challenge before us. a central bank, the federal reserve has cherished the independence and implementing monetary goals. we have the

the humphrey hawkins charges the federal reserve with a dual mandate, both maintaining stable prices and full employment. currently, the unemployment rate is 8.9%. since president obama took office, it's gone from 7.8% around inauguration to 10% as the impact of the financial crisis spread, to 8.1% today. i do believe that the u.s. economy is heading in the right directi direction. with the proper nudge, it could probably improve even more. as of march, the consumer price index was 2.7%. over the past year, a decline from february of this year of 2.9%. during the same period, the energy index has risen 4.6%, and the food index has increased 3.3%. both increases are smaller than last month. in contrast, the year change in the index for all items, less food and energy, which was 2.2% in february, edged up to 2.3% in march. all of these factors play a very important role in getting america back to economic growth and prosperity. i look forward to the witnesses testimony. mr. chairman, i would yield back. >> thank you, gentlemen. now i yield five minutes to dr. hayward. >> thank you, mr.

former member of the staff of this committee and that i served on the team that drafted the humphrey hawkins full employment and balanced growth act. i wish to speak in support of the mandate. that law was drafted at a time of acute eratical conflict on economics and on the staff, i was a young liberal. one of our colleagues james pierce, two other

the growth act of 1970 a, better known as the humphrey-hawkins act, says benchmarks, growth, and price stability, and the balance of trade. to monitor progress, it mandated that the board of governors at the federal reserve presents semiannual reports to congress on the state of the u.s. economy. the humphrey-hawkins charges charges a dual mandate both maintaining stable prices and full employment. currently the unemployment rate is 8.1%. since president obama took office in january of 09, the unemployment rate has gone from 7.8% to around 10% as the impact of financial crisis spreads. i do believe the u.s. economy is heading in the right direction. as of march, at the consumer price index was 2.7 and%. over the past year a decline of 2.9 term. during the same time, energy has risen 4.6%. the food index has increased 3.3%. both increases are smaller than last month. the index for all items means less food and energy, which was 2.0% in february. all of these factors play a very important role in getting america back to economic growth and prosperity. i look forward to the witness's test