The FOMC: preferences, voting, and consensus
AbstractIn this paper, the author develops and uses an original dataset collected from the internal discussion of the Federal Reserve's monetary policy committee (the Federal Open Market Committee [FOMC] transcripts) to examine questions about the Committee's behavior. The data show that Chairman Alan Greenspan's proposals, after Committee discussion, were nearly always adopted unmodified in the formal vote. Despite the external appearance of consensus with little disagreement over decisions and an official dissent rate of 7.5 percent, the data reveal that the rate of disagreement in internal Committee discussions was quite high-on the order of 30 percent for discussions of the short-term interest rate. And, under the assumption that FOMC voters assigned a higher priority to their preferences for the short-term interest rate than for the bias in the policy directive, it can be shown that this bias was important for achieving consensus, which supports and extends the results of Thornton and Wheelock (2000). Thus, the novel dataset described in this paper helps to shed some light on the internal workings of the FOMC in the Greenspan years.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Federal Reserve Bank of St. Louis in its journal Review.
Volume (Year): (2005)
Issue (Month): Mar ()
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ben S. Bernanke & Ilian Mihov, 1995.
"Measuring monetary policy,"
Working Papers in Applied Economic Theory
95-09, Federal Reserve Bank of San Francisco.
- James D. Hamilton & Oscar Jorda, 2002.
"A Model of the Federal Funds Rate Target,"
Journal of Political Economy,
University of Chicago Press, vol. 110(5), pages 1135-1167, October.
- James D. Hamilton & Oscar Jorda, . "A model for the federal funds rate target," Department of Economics 99-07, California Davis - Department of Economics.
- Oscar Jorda & James D. Hamilton, 2003. "A model for the federal funds rate target," Working Papers 997, University of California, Davis, Department of Economics.
- James D. Hamilton & Oscar Jorda, 2000. "A Model for the Federal Funds Rate Target," NBER Working Papers 7847, National Bureau of Economic Research, Inc.
- Daniel L. Thornton, 2005. "When did the FOMC begin targeting the federal funds rate? what the verbatim transcripts tell us," Working Papers 2004-015, Federal Reserve Bank of St. Louis.
- Kalyvitis, Sarantis & Michaelides, Alexander, 2001. "New evidence on the effects of US monetary policy on exchange rates," Economics Letters, Elsevier, vol. 71(2), pages 255-263, May.
- Meade, Ellen E & Sheets, D Nathan, 2005. "Regional Influences on FOMC Voting Patterns," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(4), pages 661-77, August.
- Gerlach-Kristen, Petra, 2008. "Taking two steps at a time: On the optimal pattern of policy interest rates," Journal of Economic Dynamics and Control, Elsevier, vol. 32(2), pages 550-570, February.
- Daniel Seidmann, 2011. "A theory of voting patterns and performance in private and public committees," Social Choice and Welfare, Springer, vol. 36(1), pages 49-74, January.
- Etienne Farvaque & Hakim Hammadou & Piotr Stanek, 2011. "Selecting Your Inflation Targeters: Background and Performance of Monetary Policy Committee Members," German Economic Review, Verein für Socialpolitik, vol. 12(2), pages 223-238, 05.
- Tillmann, Peter, 2011. "Strategic forecasting on the FOMC," European Journal of Political Economy, Elsevier, vol. 27(3), pages 547-553, September.
- Alessandro Riboni & Francisco J. Ruge-Murcia, 2011.
"Dissent in Monetary Policy Decisions,"
Working Paper Series
27_11, The Rimini Centre for Economic Analysis.
- RIBONI, Alessandro & RUGE-MURCIA, Francisco J., 2011. "Dissent in Monetary Policy Decisions," Cahiers de recherche 06-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- RIBONI, Alessandro & RUGE-MURCIA, Francisco J., 2011. "Dissent in Monetary Policy Decisions," Cahiers de recherche 2011-05, Universite de Montreal, Departement de sciences economiques.
- Ellen Meade, 2006. "Dissent and Disagreement on the Fed's FOMC: Understanding Regional Affiliations and limits to Transparency," DNB Working Papers 094, Netherlands Central Bank, Research Department.
- Carl Andreas Claussen & Egil Matsen & Øistein Røisland & Ragnar Torvik, 2009.
"Overconfidence, Monetary Policy Committees and Chairman Dominance,"
2009/17, Norges Bank.
- Claussen, Carl Andreas & Matsen, Egil & Røisland, Øistein & Torvik, Ragnar, 2012. "Overconfidence, monetary policy committees and chairman dominance," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 699-711.
- Alexander Jung & Gergely Kiss, 2012. "Voting by monetary policy committees: evidence from the CEE inflation-targeting countries," MNB Working Papers 2012/2, Magyar Nemzeti Bank (the central bank of Hungary).
- Job Swank & Otto Swank & Bauke Visser, 2006. "Transparency and Pre-meetings," Tinbergen Institute Discussion Papers 06-051/1, Tinbergen Institute.
- Fendel, Ralf & Rülke, Jan-Christoph, 2012. "Are heterogeneous FOMC forecasts consistent with the Fed’s monetary policy?," Economics Letters, Elsevier, vol. 116(1), pages 5-7.
- Jung, Alexander & Kiss, Gergely, 2012. "Preference heterogeneity in the CEE inflation-targeting countries," European Journal of Political Economy, Elsevier, vol. 28(4), pages 445-460.
- Ellen E. Meade & Daniel L. Thornton, 2010.
"The Phillips curve and US monetary policy: what the FOMC transcripts tell us,"
2010-017, Federal Reserve Bank of St. Louis.
- Ellen E. Meade & Daniel L. Thornton, 2012. "The Phillips curve and US monetary policy: what the FOMC transcripts tell us," Oxford Economic Papers, Oxford University Press, vol. 64(2), pages 197-216, April.
- Ellen E. Meade & Daniel L. Thornton, 2010. "The Phillips Curve and US Monetary Policy: What the FOMC Transcripts Tell Us," Working Papers 2010-18, American University, Department of Economics.
- Christopher Crowe & Ellen E. Meade, 2007. "The Evolution of Central Bank Governance around the World," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 69-90, Fall.
- Otto H. Swank & Bauke Visser, 2007.
"Is Transparency to no avail? Committee Decision-making, Pre-meetings, and Credible Deals,"
Tinbergen Institute Discussion Papers
07-055/1, Tinbergen Institute.
- Otto H. Swank & Bauke Visser, 2008. "Is Transparency to No Avail? Committee Decision-Making, Pre-Meetings, and Credible Deals," Economics Working Papers ECO2008/18, European University Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anna Xiao).
If references are entirely missing, you can add them using this form.