How Experts Decide: Preferences or Private Assessments on a Monetary Policy Committee?*

Stephen Hansen, Carlos Velasco Rivera and Michael McMahon

CAMA Working Papers from Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University

Abstract: Using voting data from the Bank of England, we show that different individual assessments of the economy strongly influence votes after controlling for individual policy preferences. We estimate that internal members form more precise assessments than externals and are also more hawkish, though preference differences are very small if members vote strategically. Counterfactual analysis shows that committees add value through aggregating private assessments, but that gains to larger committees taper off quickly beyond five members. There is no evidence that externals add value through preference moderation. Since their assessments also have lower precision, mixed committees may not be optimal.

Keywords: Committees; Monetary policy (search for similar items in EconPapers)
JEL-codes: D78 E52 E58 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2013-04
New Economics Papers: this item is included in 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 (9)

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Working Paper: How Expoerts Decide: Preferences or Private Assessments on a Monetary Policy Committee? (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:een:camaaa:2013-19

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