Membership Turnover and Policy Disagreement at the FOMC

Alessandro Riboni and Francisco Ruge-Murcia

No 20613, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper examines the implications of turnover for decision-making by the Federal Open Market Committee (FOMC). The analysis is based on a voting model where 1) the chair has agenda-setting powers but must secure the median’s approval for her proposal to pass, and 2) the identity of the median changes stochastically over time through voting-right rotation and partisan appointments. The method-of-moments estimation of the model using data from 274 FOMC meetings delivers estimates of the chair and median preference parameters along a dovish-hawkish scale and of their disagreement in each meeting in the sample. Results indicate that disagreement increases the probability of dissents and policy inertia, but that turnover does not increase the volatility of interest rate adjustments.

Keywords: Collective; decision-making (search for similar items in EconPapers)
JEL-codes: D7 E5 (search for similar items in EconPapers)
Date: 2025-09
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