The Policy Choices and Reaction Functions of Bank of England MPC Members

Mark Harris and Christopher Spencer

Southern Economic Journal, 2009, vol. 76, issue 2, 482-499

Abstract: The results of an econometric exercise are presented, showing that Monetary Policy Committee (MPC) members appointed from outside the ranks of Bank of England staff (outsiders) react differently to forecasts of inflation and output than those appointed from within the Bank (insiders). All results are reinforced by the well‐established findings that, compared with outsiders, insiders choose higher interest rates, are more likely to vote as a bloc, and feature on the winning side of policy decisions more frequently. On the basis of these results, it is argued that the current MPC framework is biased toward the policy choices of insiders.

Date: 2009
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https://doi.org/10.4284/sej.2009.76.2.482

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:76:y:2009:i:2:p:482-499

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