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Monetary Policy Committees and DeGrootian Consensus

Author

Listed:
  • Christopher Spencer

    (Loughborough University)

Abstract

Reaching a decision on the policy interest-rate often requires members of a monetary policy committee (MPC) to form a consensus. To model this phenomenon, a formal deliberation mechanism that captures how committee members achieve consensus à la Morris DeGroot (1974) is employed. Numerical simulations demonstrate how DeGroot's framework informs how so-called autocratically collegial, genuinely collegial, and individualistic MPCs (Blinder, 2007) reach agreement.

Suggested Citation

  • Christopher Spencer, 2014. "Monetary Policy Committees and DeGrootian Consensus," Economics Bulletin, AccessEcon, vol. 34(2), pages 1291-1302.
    • Handle: RePEc:ebl:ecbull:eb-12-00193
    as

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    References listed on IDEAS

    as
    1. Belden, Susan, 1989. "Policy Preferences of FOMC Members as Revealed by Dissenting Votes," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(4), pages 432-441, November.
    2. Alessandro Riboni & Francisco J. Ruge-Murcia, 2010. "Monetary Policy by Committee: Consensus, Chairman Dominance, or Simple Majority?," The Quarterly Journal of Economics, Oxford University Press, vol. 125(1), pages 363-416.
    3. Vidal, Jean-Pierre & Maurin, Vincent, 2012. "Monetary policy deliberations: committee size and voting rules," Working Paper Series 1434, European Central Bank.
    4. Mark Harris & Paul Levine & Christopher Spencer, 2011. "A decade of dissent: explaining the dissent voting behavior of Bank of England MPC members," Public Choice, Springer, vol. 146(3), pages 413-442, March.
    5. Blinder, Alan S., 2007. "Monetary policy by committee: Why and how?," European Journal of Political Economy, Elsevier, vol. 23(1), pages 106-123, March.
    6. Petra Gerlach‐Kristen, 2009. "Outsiders at the Bank of England's MPC," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(6), pages 1099-1115, September.
    7. Gerlach-Kristen, Petra, 2006. "Monetary policy committees and interest rate setting," European Economic Review, Elsevier, vol. 50(2), pages 487-507, February.
    8. Neilson, William S. & Winter, Harold, 2008. "Votes based on protracted deliberations," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 308-321, July.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Monetary policy committees; consensus formation; deliberation;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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