Elements of Optimal Monetary Policy Committee Design
AbstractThe move from individual decision making to committee decision making is widely seen as a major evolution in contemporary central banking. This paper reviews the relevant economics and social psychology literatures with a view to providing some insights into the question of optimal monetary policy committee design. While the preference aggregation literature points to the effect of committee structure on the extent of the time inconsistency problem and its associated costs, the belief aggregation literature analyzes how different committee structures affect the efficiency of information pooling, the process of social influence, and collective accuracy. In conclusion, we highlight the main tradeoffs that the analysis has brought to light and point to directions for future research.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 06/277.
Date of creation: 01 Dec 2006
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-06 (All new papers)
- NEP-CBA-2007-01-06 (Central Banking)
- NEP-MAC-2007-01-06 (Macroeconomics)
- NEP-MON-2007-01-06 (Monetary Economics)
- NEP-POL-2007-01-06 (Positive Political Economics)
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- Berger, Helge & Nitsch, Volker, 2008.
"Too many cooks? Committees in monetary policy,"
2008/8, Free University Berlin, School of Business & Economics.
- Berk, Jan Marc & Bierut, Beata K., 2011. "Communication in a monetary policy committee," European Journal of Political Economy, Elsevier, vol. 27(4), pages 791-801.
- Marcel Peter & Scott Roger & Geoffrey Heenan, 2006. "Implementing Inflation Targeting: Institutional Arrangements, Target Design, and Communications," IMF Working Papers 06/278, International Monetary Fund.
- Philipp Maier, 2007. "Monetary Policy Committees in Action: Is There Room for Improvement?," Working Papers 07-6, Bank of Canada.
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