The Central Bank Governor and Interest Rate Setting by Committee

Emile van Ommeren and Giulia Piccillo

CESifo Economic Studies, 2021, vol. 67, issue 2, 155-185

Abstract: This article studies the role of central bank governors in monetary policy decisions taken by a committee. To carry out this analysis, we constructed a novel dataset of committee voting behaviour for six OECD countries for up to three decades. Using a range of Taylor rule specifications, we show that a change in governor significantly affects interest rate setting. We also observe systematic differences in interest rate rules based on the political party appointing the governor, with more inflation-averse policies under governors that are appointed by a right-wing political authority. We show the robustness of this result by using a wider dataset (including over 3000 observations from 12 countries). (JEL codes: E02, E5, P16)

Keywords: monetary policy; Taylor rule; central bank governors (search for similar items in EconPapers)
Date: 2021
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Working Paper: The Central Bank Governor and Interest Rate Setting by Committee (2019)
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