The discursive dilemma in monetary policy

Carl Claussen and Øistein Røisland

No 2010/05, Working Paper from Norges Bank

Abstract: The discursive dilemma implies that the policy decision of a board of policymakers depends on whether the board reaches the decision by voting directly on policy (conclusion-based procedure), or by voting on the premises for the decision (premise-based procedure). We derive results showing when the discursive dilemma may occur, both in a general model and in a standard monetary policy model. When the board aggregates by majority voting, a discursive dilemma can occur if either (i) the relationship between the premise and the decision is non-monotonic, or (ii) if the board members have different judgments on at least two of the premises. Normatively, a premise-based procedure tends to give better decisions when there is disagreement on parameters of the model.

Pages: 32 pages
Date: 2010-04-20
New Economics Papers: this item is included in nep-cba, nep-cdm, nep-mac and nep-mon
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Citations: View citations in EconPapers (3)

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https://www.norges-bank.no/en/news-events/news-pub ... pers/2010/WP-201005/

Related works:
Journal Article: The Discursive Dilemma in Monetary Policy (2014)
Working Paper: The Discursive Dilemma in Monetary Policy (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:bno:worpap:2010_05

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