EconPapers    
Economics at your fingertips  
 

How committees reduce the volatility of policy rates

Etienne Farvaque (), Norimichi Matsueda () and Pierre-Guillaume Méon ()

No 07-11.RS, DULBEA Working Papers from ULB -- Universite Libre de Bruxelles

Abstract: This paper relates the volatility of interest rates to the collective nature of monetary policymaking in monetary unions. Several decision rules are modelled, including hegemonic and democratic procedures, and also committees headed by a chairman. A ranking of decision rules in terms of the volatility of policy rates is obtained, showing that the presence of a chairman has a cooling e¤ect. However, members of a monetary union are better off under symmetric rules (voting, consensus, bargaining), unless they themselves chair the union. The results are robust to the inclusion of heterogeneities among members of the monetary union.

Keywords: Monetary Policy Committees; Decision Procedures; Interest-rate; Monetary Union (search for similar items in EconPapers)
JEL-codes: D70 E43 E58 F33 (search for similar items in EconPapers)
Pages: 42 p.
Date: 2007-07
New Economics Papers: this item is included in nep-cba, nep-cdm, nep-mac, nep-mon and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19) Track citations by RSS feed

Published by: DULBEA - Université libre de Bruxelles, Bruxelles

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/8422/1/pgm-0035.pdf pgm-0035 (application/pdf)

Related works:
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:dul:wpaper:07-11rs

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... .ulb.ac.be:2013/8422

Access Statistics for this paper

More papers in DULBEA Working Papers from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().

 
Page updated 2021-07-22
Handle: RePEc:dul:wpaper:07-11rs