How Experts Decide: Identifying Preferences versus Signals from Policy Decisions

Stephen Hansen and Michael McMahon
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Stephen Hansen: Universitat Pompeu Fabra

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

Abstract: A large theoretical literature assumes that experts differ in terms of preferences and the distribution of their private signals, but the empirical literature to date has not separately identified 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 differences 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 differ significantly on both dimensions. Key words: Bayesian decision making ; Committees ; Monetary policy JEL classification: D81 ; D82 ; E52

Date: 2011
New Economics Papers: this item is included in nep-cba and nep-cdm
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Citations: View citations in EconPapers (4)

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https://warwick.ac.uk/fac/soc/economics/research/w ... s/2011/twerp_963.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:wrk:warwec:963

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