Monetary Policy by Committee: Consensus, Chairman Dominance or Simple Majority?

Francisco Ruge-Murcia and Alessandro Riboni
Additional contact information
Alessandro Riboni: University of Montreal

No 142, 2008 Meeting Papers from Society for Economic Dynamics

Abstract: This paper studies the theoretical and empirical implications of monetary policy making by committee under three different voting protocols. The protocols are a consensus model, where super-majority is required for a policy change; an agenda-setting model, where the chairman controls the agenda; and a simple majority model, where policy is determined by the median member. These protocols give preeminence to different aspects of the actual decision making process and capture the observed heterogeneity in formal procedures across central banks. The models are estimated by Maximum Likelihood using interest rate decisions by the committees of five central banks, namely the Bank of Canada, the Bank of England, the European Central Bank, the Swedish Riksbank, and the U.S. Federal Reserve. For all central banks, results indicate that the consensus model is statistically superior to the alternative models. This suggests that despite institutional differences, committees share unwritten rules and informal procedures that deliver observationally equivalent policy decisions.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2008/paper_142.pdf (application/pdf)

Related works:
Journal Article: Monetary Policy by Committee: Consensus, Chairman Dominance, or Simple Majority? (2010)
Working Paper: Monetary Policy by Committee:Consensus, Chairman Dominance or Simple Majority? (2008)
Working Paper: Monetary Policy by Committee: Consensus, Chairman Dominance or Simple Majority? (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed008:142

Access Statistics for this paper

More papers in 2008 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().