Network structures and heterogeneity in policy preferences at the FOMC

Arnab Bhattacharjee, Sean Holly and Mustapha Wasseja

No 2024-10, Accountancy, Economics, and Finance Working Papers from Heriot-Watt University, Department of Accountancy, Economics, and Finance

Abstract: Transcripts from the US Federal Open Markets Committee provide, albeit with a lag, valuable information on the monetary policymaking process at the Federal Reserve Bank. We use the data compiled by Chappell et al. (2005b) on preferred interest rates (not votes) of individual FOMC members. Together with information on which monetary policy decisions are based, we use these preferred rates to understand decision making in the FOMC, focussing both on cross-member heterogeneity and interaction among the members of the committee. Our contribution is to provide a method of unearthing otherwise unobservable interactions between the members of the FOMC. We find substantial heterogeneity in the policy reaction function across members. Further, we identify significant interactions between individuals on the committee. The nature of these interdependencies tell us something about information sharing and strategic interactions within the FOMC and provide interesting comparisons with the Bank of England's Monetary Policy Committee.

Keywords: Monetary policy; Interest rates; FOMC decision making; Spatial Weights Matrix; Spatial Lag Model (search for similar items in EconPapers)
JEL-codes: C31 C34 E42 E43 E50 E58 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cdm and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/303042/1/190281617X.pdf (application/pdf)

Related works:
Working Paper: Network Structures and Heterogeneity in Policy Preferences at the FOMC (2024)
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:zbw:hwuaef:303042

Access Statistics for this paper

More papers in Accountancy, Economics, and Finance Working Papers from Heriot-Watt University, Department of Accountancy, Economics, and Finance Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().