The Great Inflation of the 1970s in the United States is generally ascribed to a failed monetary policy followed by the Fed under Burn’s chairmanship. Two main types of explanations have been given for this failure. The first argues that Burns’s policy choices were based on his acceptance of the Phillips curve. The second type of explanation emphasizes the role of political pressure on the Fed's choices. In this article we seek to demonstrate how the conflict between the Fed and Congress between 1974 and 1978 was primarily due to the post-Watergate legislative’s attempt to redefine the spheres of power between institutions and make the central bank an agent under its control. Burns's failure to disinflate the American economy therefore appears at least partly attributable to his efforts to defend the Fed from Congress's various attacks on its independence and the desire not to exacerbate the clash over monetary policy.
Pittaluga et al. (Sun,) studied this question.