Collective Versus Individual Decisionmaking: A Case Study of the Bank of Israel Law

Francisco Ruge-Murcia and Alessandro Riboni

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

Abstract: The new Bank of Israel Law of 2010 changed monetary policy decisionmaking at the Bank of Israel from a setup where decisions are taken by the governor to one where decisions are taken by a committee of voting members. We use this institutional change as a natural experiment to compare individual versus collective decisionmaking. Empirical results show different dynamics for interest rate decisions across the two regimes and support the view that the status quo bias is larger when decisions are taken by a committee than when they are taken by a single individual.

Keywords: committees; voting models; political economy of central banking (search for similar items in EconPapers)
JEL-codes: D7 E5 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2016
New Economics Papers: this item is included in nep-cdm, nep-ger, nep-mac and nep-mon
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Journal Article: Collective versus individual Decision-Making: A case study of the Bank of Israel Law (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montec:06-2016

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