The Discursive Dilemma in Monetary Policy

Carl Claussen and Øistein Røisland

Scandinavian Journal of Economics, 2014, vol. 116, issue 3, 702-733

Abstract: The discursive dilemma implies that the decision of a board depends on whether the board votes directly on the decision (conclusion-based procedure) or votes on the premises for the decision (premise-based procedure). We derive results showing when the discursive dilemma might occur. Under majority voting, a discursive dilemma can occur either (i) if the relationship between the premise and the decision is non-monotonic, or (ii) if the board members have different judgments on at least two of the premises. Normatively, a premise-based procedure tends to give better decisions when there is disagreement on parameters of the model.

Date: 2014
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Related works:
Working Paper: The discursive dilemma in monetary policy (2010)
Working Paper: The Discursive Dilemma in Monetary Policy (2010)
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