Determinants of the size of a monetary policy committee: Theory and cross country evidence

Szilárd Erhart and Jose Luis Vasquez-Paz ()
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Jose Luis Vasquez-Paz: Banco Central de Reserva del Perú

No 2008-001, Working Papers from Banco Central de Reserva del Perú

Abstract: Theoretical and empirical studies of different sciences suggest that an optimal committee consists of roughly 5-9 members, although it can swell mildly under specific circumstances. This paper develops a conceptual model in order to analyze the issue in case of monetary policy formulation. The number of monetary policy committee (MPC) size varies according to the size of the monetary zone and overall economic stability. Our conceptual model is backed up with econometric evidence using a 2006 survey of 85 countries. The survey is available for further research and published on the web. The MPC size of large monetary zones (EMU, USA, Japan) is close to the estimated optimal level, but there exist several smaller countries with too many or too few MPC members.

Keywords: Monetary; policy. (search for similar items in EconPapers)
JEL-codes: E50 E58 (search for similar items in EconPapers)
Date: 2008-01
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:rbp:wpaper:2008-001

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