Monetary Policy by Committee: Why and How?

Alan S. Blinder

DNB Working Papers from Netherlands Central Bank, Research Department

Abstract: Among the most notable, but least discussed, hallmarks of what I have called the "quiet revolution" in central banking practice (Blinder, 2004a) has been the movement toward making monetary policy decisions by committee. Until about a decade ago, most central banks had a single governor, who might or might not have been independent of the rest of the government. But since then, the United Kingdom, Japan, Sweden, Norway, Switzerland, and Brazil, to name just a few, have opted to establish monetary policy committees (MPCs). In addition, the committee-based ECB replaced 12 central banks, most of which had previously been run by individual governors. Thus the existence of a pronounced worldwide trend is clear. In this paper, I discuss two questions. The first question is why. Why have so many central banks switched from individual to group decisionmaking? The second question is how. How should central banks make decisions and how should they communicate with the public, the government, and the markets?

Keywords: central banks; committees; voting; communication. (search for similar items in EconPapers)
JEL-codes: E58 D71 D78 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-cdm, nep-mac, nep-mon and nep-sea
Date: 2006-02
View list of references View citations in EconPapers

Downloads: (external link)
http://www.dnb.nl/en/binaries/Working%20Paper%20No%2E%2092-2006_tcm47-146749.pdf (application/pdf)

Related works:
Working Paper: Monetary Policy by Committee: Why and How? (2005)
Journal Article: Monetary policy by committee: Why and how? (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:dnb:dnbwpp:092

Access Statistics for this paper

More papers in DNB Working Papers from Netherlands Central Bank, Research Department
Contact information at EDIRC.
Series data maintained by Arjen Siegmann ().