Could the ECB Governing Council Avoid the Formation of Coalition?

Gilbert Bougi (), Audrey Buf (), Jean-Pierre Centi () and Armand Taranco ()
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Gilbert Bougi: CERGAM-CAE, Aix-Marseille Université
Audrey Buf: CERGAM-CAE, Aix-Marseille Université
Jean-Pierre Centi: CERGAM-CAE, Aix-Marseille Université
Armand Taranco: Aix-Marseille Université

No 99, CAE Working Papers from Aix-Marseille Université, CERGAM

Abstract: This paper focuses on the possible coalition formation in the Governing Council of the European Central Bank (ECB) over the period 2007-2011. In this way, we determine a priori monetary policy stance for each European members through the estimation of Taylor- type rule. Our results show that the ECB Governing Council is strongly heterogeneous with different monetary preferences. Discrepancies among committee members could lead to potential alliances in the Council. The formation of coalition, analyzed through a cluster analysis, reveals that it could be difficult for the Executive Board to impose European perspectives. The analysis of voting power emphasizes that the Executive board will lose its strategic position when national governors form coalitions.

Keywords: European Monetary Union; Cluster analysis; Voting power; Decision-making process; Taylor rule (search for similar items in EconPapers)
JEL-codes: D72 D78 E52 (search for similar items in EconPapers)
Date: 2012-02
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Persistent link: http://EconPapers.repec.org/RePEc:cgm:wpaper:99

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