How committees impact the volatility of policy rates
AbstractThis paper relates the volatility of interest rates to the collective nature of monetary policymaking in monetary unions. Several decision rules are modelled, including hegemonic and democratic procedures, and also committees headed by a chairman. A ranking of decision rules in terms of the volatility of policy rates is obtained, showing that the presence of a chairman has a cooling effect. However, members of a monetary union are better off under symmetric rules (voting, averaging, bargaining), unless they themselves chair the union. The results are robust to the inclusion of heterogeneities among members of the monetary union.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. 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.
Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/13608.
Date of creation: Dec 2009
Date of revision:
Publication status: Published in: Journal of Macroeconomics (2009)
Monetary policy committees; Decision procedures; Interest-rate; M;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Bernd Hayo & Pierre-Guillaume Méon, 2013.
"Behind closed doors: Revealing the ECB’s Decision Rule,"
Working Papers CEB
13-025, ULB -- Universite Libre de Bruxelles.
- Bernd Hayo & Pierre-Guillaume Méon, 2011. "Behind closed doors: Revealing the ECB’s Decision Rule," MAGKS Papers on Economics 201135, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Benoit Pauwels).
If references are entirely missing, you can add them using this form.