This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

On the Optimality of Decisions made by Hub-and-Spokes Monetary Policy Committees

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Jan Marc Berk
Beata K. Bierut

Additional information is available for the following registered author(s):

Abstract

Most monetary policy committees decide on interest rates using a simple majority voting rule. Given the inherent heterogeneity of committee members, this voting rule is suboptimal in terms of the quality of the interest rate decision, but popular for other (political) reasons. We show that a clustering of committee members into two subgroups, as is the case in hub-and-spokes systems of central banks (e.g. the Fed or the ESCB), can eliminate this inefficiency whilst retaining the simple majority voting rule.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. 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.

File URL: http://www.dnb.nl/en/binaries/Working%20Paper%20No%2E%2027-2005_tcm47-146684.pdf
Our checks indicate that this address may not be valid because: 404 /en/binaries/Working Paper No. 27-2005_tcm47-146684.pdf. If this is indeed the case, please notify (Arjen Siegmann)
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 027.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:dnb:dnbwpp:027

Contact details of provider:
Postal: Postbus 98, 1000 AB Amsterdam
Web page: http://www.dnb.nl/en/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Arjen Siegmann).

Related research
Keywords:

Other versions of this item:

Find related papers by JEL classification:
D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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.:
  1. Barro, Robert J & Gordon, David B, 1983. "A Positive Theory of Monetary Policy in a Natural Rate Model," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 589-610, August. [Downloadable!] (restricted)
    Other versions:
  2. Kaushik Mukhopadhaya, 2003. "Jury Size and the Free Rider Problem," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(1), pages 24-44, April.
  3. Carsten Hefeker, 2003. "Federal Monetary Policy," Scandinavian Journal of Economics, Blackwell Publishing, vol. 105(4), pages 643-659, December. [Downloadable!] (restricted)
    Other versions:
  4. Marvin Goofriend, 1999. "The role of a regional bank in a system of central banks," Working Paper 99-04, Federal Reserve Bank of Richmond. [Downloadable!]
    Other versions:
  5. Henry W. Chappell, Jr. & Rob Roy McGregor & Todd A. Vermilyea, 2005. "Committee Decisions on Monetary Policy: Evidence from Historical Records of the Federal Open Market Committee," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262033305.
  6. Alan S. Blinder, 1999. "Central Banking in Theory and Practice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522608.
  7. Timothy Feddersen & Wolfgang Pesendorfer, 1996. "Convicting the Innocent: The Inferiority of Unanimous Jury Verdicts," Discussion Papers 1170, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  8. Hahn, Volker & Gersbach, Hans, 2001. "Voting Transparency and Conflicting Interests in Central Bank Councils," Discussion Paper Series 1: Economic Studies 2001,03, Deutsche Bundesbank, Research Centre. [Downloadable!]
  9. Hahn, Volker & Gersbach, Hans, 2001. "Should the Individual Voting Records of Central Bankers be Published?," Discussion Paper Series 1: Economic Studies 2001,02, Deutsche Bundesbank, Research Centre. [Downloadable!]
    Other versions:
  10. 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.
  11. Ben-Yashar, Ruth C & Nitzan, Shmuel I, 1997. "The Optimal Decision Rule for Fixed-Size Committees in Dichotomous Choice Situations: The General Result," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(1), pages 175-86, February.
  12. Gradstein, Mark & Nitzan, Shmuel & Paroush, Jacob, 1990. " Collective Decision Making and the Limits on the Organization's Size," Public Choice, Springer, vol. 66(3), pages 279-91, September.
  13. Gildea, John A, 1992. "The Regional Representation of Federal Reserve Bank Presidents," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 24(2), pages 215-25, May. [Downloadable!] (restricted)
  14. Nicola Persico, 2004. "Committee Design with Endogenous Information," Review of Economic Studies, Blackwell Publishing, vol. 71(1), pages 165-191, 01. [Downloadable!] (restricted)
  15. Chappell, Henry Jr. & Havrilesky, Thomas M. & McGregor, Rob Roy, 1995. "Policymakers, institutions, and central bank decisions," Journal of Economics and Business, Elsevier, vol. 47(2), pages 113-136, May. [Downloadable!] (restricted)
  16. 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 432-41, November. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Jan Marc Berk & Beata K. Bierut, 2005. "Communication in Monetary Policy Committees," DNB Working Papers 059, Netherlands Central Bank, Research Department. [Downloadable!]
Statistics
Access and download statistics

Did you know? Authors can create their own profile with links to their works on the RePEc Author Service.

This page was last updated on 2009-11-10.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.