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Dissent in Monetary Policy Decisions

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  • Alessandro Riboni

    (Department of Economics, University of Montreal)

  • Francisco J. Ruge-Murcia

    (Department of Economics, University of Montreal and Rimini Centre for Economic Analysis (RCEA))

Abstract

Voting records indicate that dissents in monetary policy committees are frequent and predictability regressions show that they help forecast future policy decisions. In order to study whether the latter relation is causal, we construct a model of committee decision making and dissent where members' decisions are not a function of past dissents. The model is estimated using voting data from the Bank of England and the Riksbank. Stochastic simulations show that the decision-making frictions in our model help account for the predictive power of current dissents. The e ect of institutional characteristics and structural parameters on dissent rates is examined using simulations as well.

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Bibliographic Info

Paper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 27_11.

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Date of creation: May 2011
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Handle: RePEc:rim:rimwps:27_11

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Keywords: Committees; voting models; political economy of central banking;

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Cited by:
  1. "Belderbos, Rene & Ikeuchi, Kenta & Fukao, Kyoji & Kim, Young Gak & Kwon, Hyeog Ug, 2013. "Plant Productivity Dynamics and Private and Public R&D Spillovers: Technological, Geographic and Relational Proximity," CEI Working Paper Series 2013-05, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
  2. Hamza Bennani, 2012. "National influences inside the ECB: an assessment from central bankers' statements," Working Papers hal-00992646, HAL.
  3. William H.Greene & Max Gillman & Mark N. Harris & Christopher Spencer, 2013. "The Tempered Ordered Probit (TOP) model with an application to monetary policy," Discussion Paper Series 2013_10, Department of Economics, Loughborough University, revised Sep 2013.
  4. Roman Horvath & Katerina Smidkova & Jan Zapal, 2012. "Is the U.S. Fed Voting Record Informative about Future Monetary Policy?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 62(6), pages 478-484, December.

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