Too Many Cooks? Committees in Monetary Policy

Helge Berger (hberger@imf.org) and Volker Nitsch

No 08-195, KOF Working papers from KOF Swiss Economic Institute, ETH Zurich

Abstract: How many people should decide about monetary policy? In this paper, we take an empirical perspective on this issue, analyzing the relationship between the number of monetary policy decision-makers and monetary policy outcomes. Using a new data set that characterizes Monetary Policy Committees (MPCs) in more than 30 countries from 1960 through 2000, we find a U-shaped relation between the membership size of MPCs and inflation; our results suggest that the lowest level of inflation is reached at MPCs with about seven to ten members. Similar results are obtained for other measures, such as inflation variability and output growth. We also find that MPC size influences the success of monetary targeting regimes. In contrast, there is no evidence that either turnover rates of MPC members or the membership composition of MPCs affect economic outcomes.

Keywords: Central bank design; Monetary policy committee; Central bank board; Central bank council; Governance; Inflation (search for similar items in EconPapers)
Pages: 25 pages
Date: 2008-04
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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http://dx.doi.org/10.3929/ethz-a-005626058 (application/pdf)

Related works:
Journal Article: Too Many Cooks? Committees in Monetary Policy (2011)
Working Paper: Too Many Cooks? Committees in Monetary Policy (2011)
Working Paper: Too many Cooks? Committees in Monetary Policy (2008)
Working Paper: Too many cooks? Committees in monetary policy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:kof:wpskof:08-195

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