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Preferences or Private Assessments on a Monetary Policy Committee?∗ (2014)
| Citations: | 2 - 1 self |
BibTeX
@MISC{Hansen14preferencesor,
author = {Stephen Hansen and Michael Mcmahon and Carlos Velasco Rivera},
title = {Preferences or Private Assessments on a Monetary Policy Committee?∗},
year = {2014}
}
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Abstract
Using Bank of England voting data, we show empirically that members ’ votes are driven by heteroge-neous individual assessments of the economy as well as their individual policy preferences. Estimates indicate that internal committee members form more precise assessments than externals and are also more hawkish. The estimates allow the first quantification of the gain due to information aggregation on monetary policy committees. The marginal gain from additional committee members tapers quickly after five members. There is no evidence of gains through externals ’ moderating internals ’ preferences. A relatively small committee of highly informed internal members emerges as a desirable committee structure.
Keyphrases
monetary policy committee private assessment internal member information aggregation internal committee member additional committee member taper member vote individual policy preference precise assessment internals preference heteroge-neous individual assessment marginal gain desirable committee structure small committee first quantification
