The Discursive Dilemma in Monetary Policy

Carl Claussen and Øistein Røisland

No 240, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: The discursive dilemma implies that the policy decision of a board of policymakers depends on whether the board reaches the decision by voting directly on policy (conclusion-based procedure), or by voting on the premises for the decision (premise-based procedure). We derive results showing when the discursive dilemma may occur, both in a general model and in a standard monetary policy model. When the board aggregates by majority voting, a discursive dilemma can occur if either (i) the relationship between the premise and the decision is non- monotonic, or (ii) if the board members have di¤erent judgments on at least two of the premises. Normatively, a premise-based procedure tends to give better decisions when there is disagreement on parameters of the model.

Keywords: Discursive dilemma; Monetary policy; MPC; Policy boards (search for similar items in EconPapers)
JEL-codes: D71 E52 E58 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2010-04-01
New Economics Papers: this item is included in nep-cba and nep-mon
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The Discursive Dilemma in Monetary Policy (2014)
Working Paper: The discursive dilemma in monetary policy (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0240

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