Collective versus individual Decision-Making: A case study of the Bank of Israel Law

Francisco Ruge-Murcia and Alessandro Riboni

European Economic Review, 2017, vol. 93, issue C, 73-89

Abstract: The new Bank of Israel Law of 2010 changed monetary policy decision-making 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 decision-making. 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)
Date: 2017
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Citations: View citations in EconPapers (14)

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Working Paper: Collective Versus Individual Decisionmaking: A Case Study of the Bank of Israel Law (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:93:y:2017:i:c:p:73-89

DOI: 10.1016/j.euroecorev.2017.01.003

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