How experts decide: identifying preferences versus signals from policy decisions

Stephen Hansen and Michael McMahon

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: A large theoretical literature assumes that experts di ffer in terms of preferences and the distribution of their private signals, but the empirical literature to date has not separately identi ed them. This paper proposes a novel way of doing so by relating the probability a member chooses a particular policy decision to the prior belief that it is correct. We then apply this methodology to study diff erences between internal and external members on the Bank of England's Monetary Policy Committee. Using a variety of proxies for the prior, we provide evidence that they di ffer significantly on both dimensions.

Keywords: bayesian decision making; committees; monetary policy (search for similar items in EconPapers)
JEL-codes: D81 D82 E52 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2011-07-18
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http://eprints.lse.ac.uk/121717/ Open access version. (application/pdf)

Related works:
Working Paper: How Experts Decide: Identifying Preferences versus Signals from Policy Decisions (2011)
Working Paper: How Experts Decide: Identifying Preferences versus Signals from Policy Decisions (2011)
Working Paper: How Experts Decide: Identifying Preferences versus Signals from Policy Decisions (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:121717

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