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The Central Bank Governor and Interest Rate Setting by Committee

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  • Emile van Ommeren
  • Giulia Piccillo

Abstract

This article studies the role of central bank governors in monetary policy decisions taken by a committee. To carry out this analysis, we constructed a novel dataset of committee voting behaviour for six OECD countries for up to three decades. Using a range of Taylor rule specifications, we show that a change in governor significantly affects interest rate setting. We also observe systematic differences in interest rate rules based on the political party appointing the governor, with more inflation-averse policies under governors that are appointed by a right-wing political authority. We show the robustness of this result by using a wider dataset (including over 3000 observations from 12 countries). (JEL codes: E02, E5, P16)

Suggested Citation

  • Emile van Ommeren & Giulia Piccillo, 2021. "The Central Bank Governor and Interest Rate Setting by Committee," CESifo Economic Studies, CESifo Group, vol. 67(2), pages 155-185.
    • Handle: RePEc:oup:cesifo:v:67:y:2021:i:2:p:155-185.
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    File URL: http://hdl.handle.net/10.1093/cesifo/ifaa013
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    2. Thang, Doan Ngoc & Anh, Pham Thi Hoang & Long, Trinh & Dong, Do Phy & Dat, Luong Van, 2022. "Monetary Stance and Favorableness of Monetary Policy in the Media: The Case of Viet Nam," ADBI Working Papers 1325, Asian Development Bank Institute.
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    More about this item

    Keywords

    monetary policy; Taylor rule; central bank governors;
    All these keywords.

    JEL classification:

    • E00 - Macroeconomics and Monetary Economics - - General - - - General

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