Explaining Interest Rate Decisions when the MPC Members Believe in Different Stories

Carl Claussen and Øistein Røisland
Additional contact information
Øistein Røisland: Norges Bank

International Journal of Central Banking, 2015, vol. 11, issue 2, 41-64

Abstract: Most central banks explain interest rate decisions, i.e., they provide a story. With committee decisions, it can be difficult to find a story that is both consistent with the decision and representative for the committee. We consider two alternative procedures: (i) vote on the interest rate and let the winner decide the story, or (ii) vote on the elements of the story and let the interest rate follow from the story. The two procedures tend to result in different outcomes due to an aggregation inconsistency called the discursive dilemma. We find that (ii) tends to yield better stories.

JEL-codes: D71 E52 E58 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ijcb.org/journal/ijcb15q2a2.pdf (application/pdf)
http://www.ijcb.org/journal/ijcb15q2a2.htm (text/html)

Related works:
Working Paper: Explaining interest rate decisions when the MPC members believe in different stories (2013)
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: https://EconPapers.repec.org/RePEc:ijc:ijcjou:y:2015:q:2:a:2

Access Statistics for this article

International Journal of Central Banking is currently edited by Loretta J. Mester

More articles in International Journal of Central Banking from International Journal of Central Banking
Bibliographic data for series maintained by Bank for International Settlements ().