Flexible Majority Rules for Central Banks

Hans Gersbach and Bernhard Pachl

No 4398, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We propose a flexible majority rule for central bank councils where the size of the majority depends monotonically on the change in interest rate within a particular time frame. Small changes in interest rate require a small share of supporting votes, even less than 50%. We show that flexible majority rules are superior to simple majority rules and can implement the optimal monetary policy under a variety of circumstances.

Keywords: Central bank; Voting; Majority rule; Flexible majority rules (search for similar items in EconPapers)
JEL-codes: D72 E52 E58 F33 (search for similar items in EconPapers)
Date: 2004-05
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Flexible Majority Rules for Central Banks (2009)
Journal Article: Flexible Majority Rules for Central Banks (2009)
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