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Policymakers' Votes and Predictability of Monetary Policy

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  • Andrei Sirchenko

Abstract

The National Bank of Poland does not publish the Monetary Policy Council's voting records before the subsequent policy meeting. Using real-time data, this paper shows that a prompter release of the voting records could improve the predictability of policy decisions. The voting patterns reveal strong and robust predictive content even after controlling for policy bias and responses to in.ation, real activity, exchange rates and financial market information. They contain information not embedded in the spreads and moves in the market interest rates, nor in the explicit forecasts of the next policy decision made by market analysts in Reuters surveys. Moreover, the direction of policymakers' dissent explains the direction of analysts.forecast bias. These findings are based on the voting patterns only, without the knowledge of policymakers' names.

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Bibliographic Info

Paper provided by European University Institute in its series Economics Working Papers with number ECO2011/05.

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Date of creation: 2011
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Handle: RePEc:eui:euiwps:eco2011/05

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Keywords: monetary policy; predictability; policy interest rate; voting records; real-time data;

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References

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Cited by:
  1. Andrei Sirchenko, 2013. "A model for ordinal responses with an application to policy interest rate," National Bank of Poland Working Papers 148, National Bank of Poland, Economic Institute.
  2. Roman Horváth & Katerina Šmídková & Jan Zápal, 2012. "Central Banks' Voting Records and Future Policy," International Journal of Central Banking, International Journal of Central Banking, vol. 8(4), pages 1-19, December.
  3. Eijffinger, S.C.W. & Mahieu, R.J. & Raes, L.B.D., 2013. "Estimating the Preferences of Central Bankers: An Analysis of Four Voting Records," Discussion Paper 2013-047, Tilburg University, Center for Economic Research.
  4. 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.
  5. 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).

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