Dissent in Monetary Policy Decisions: Effects, Channels and Implications

Christophe Blot (), Paul Hubert () and Fabien Labondance ()
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Christophe Blot: OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po, CNRS, EconomiX, Université Paris Nanterre, 92001 Nanterre
Paul Hubert: Centre de recherche de la Banque de France - Banque de France, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po
Fabien Labondance: CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE], UMLP - Université Marie et Louis Pasteur, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po

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Abstract: We investigate whether dissent in monetary policy committees affects asset prices. We exploit a feature of the ECB communication for identification: the revelation of dissent during press conferences is separated from policy decision announcements. Following a narrative approach, we compute a novel granular index of ECB dissent for each instrument and identify the dissent direction. Using tick data, we isolate asset price changes exactly when dissent is revealed. Dissent has a strong negative effect on stock prices, that operates specifically around status quo decisions. Dissent is a key driver of stock prices on these days, explaining one-third of their variation.

Keywords: Asset prices; Disagreement; Monetary Policy Committee; Bad news; European Central Bank (search for similar items in EconPapers)
Date: 2025-07-17
Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-05167799v1
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