This dominance helps explain how, even after the Fed failed to foresee the greatest economic collapse since the Great Depression, the central bank has largely escaped criticism from academic economists. In the Fed's thrall, the economists missed it, too.
'The Fed has a lock on the economics world,' says Joshua Rosner, a Wall Street analyst who correctly called the meltdown. 'There is no room for other views, which I guess is why economists got it so wrong.'
One critical way the Fed exerts control on academic economists is through its relationships with the field's gatekeepers. For instance, at the Journal of Monetary Economics, a must-publish venue for rising economists, more than half of the editorial board members are currently on the Fed payroll -- and the rest have been in the past."
Continue reading this article by Ryan Grim.