Publicity of Debate and the Incentive to Dissent: Evidence from the US Federal Reserve

Ellen Meade and David Stasavage

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: When central banks are transparent about their decision making, there may be clear benefits in terms ofcredibility, policy effectiveness, and improved democratic accountability. While recent literature has focusedon all of these advantages of transparency, in this paper we consider one potential cost: the possibility thatpublishing detailed records of deliberations will make members of a monetary policy committee more reluctantto offer dissenting opinions. Drawing on the recent literature on expert advisors with ¿career concerns¿, weconstruct a model that compares incentives for members of a monetary policy committee to voice dissent whendeliberations occur in public, and when they occur in private. We then test the implications of the model usingan original dataset based on deliberations of the Federal Reserve¿s Federal Open Market Committee, askingwhether the FOMC¿s decision in 1993 to begin releasing full transcripts of its meetings has altered incentivesfor participants to voice dissenting opinions. We find this to be the case with regard to both opinions on shortterminterest rates and on the ¿bias¿ for future policy.

Keywords: transparency; central banking; career concerns (search for similar items in EconPapers)
JEL-codes: E42 E58 E65 (search for similar items in EconPapers)
Date: 2004-01
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Publicity of Debate and the Incentive to Dissent: Evidence from the US Federal Reserve (2008)
Working Paper: Publicity of debate and the incentive to dissent: evidence from the US federal reserve (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp0608

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