Central Banking by Committee
A small economics literature on monetary policy making by committee is complemented by the literature on groups in the other social sciences. I review some of this work, focusing on the effect of size on group performance and whether committees are more moderate than individuals. Studies document that an individual's effort decreases with group size unless their contributions can be identified and evaluated and that committee membership is polarizing, tending to make committees more extreme. A particularly harmful form of group polarization occurs when a striving for consensus causes members to stop paying sufficient attention to alternative actions. The literature suggests that monetary policy committees should have a clear objective, publish individual votes and not have many more than five members. They should be structured so that members do not act as part of a group, perhaps by having short terms in office and members from outside the central bank. External scrutiny of the decision-making process should be encouraged. Copyright 2006 Blackwell Publishing Ltd.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 9 (2006)
Issue (Month): 2 (08)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=1367-0271|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=1367-0271|
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.:
- Sah, Raaj Kumar & Stiglitz, Joseph E, 1988. "Committees, Hierarchies and Polyarchies," Economic Journal, Royal Economic Society, vol. 98(391), pages 451-70, June.
- Lombardelli, Clare & James Proudman & James Talbot, 2003.
"Committees versus individuals: an experimental analysis of monetary policy decision-making,"
Royal Economic Society Annual Conference 2003
142, Royal Economic Society.
- Clare Lombardelli & James Proudman & James Talbot, 2005. "Committees Versus Individuals: An Experimental Analysis of Monetary Policy Decision-Making," International Journal of Central Banking, International Journal of Central Banking, vol. 1(1), May.
- Clare Lombardelli & James Proudman & James Talbot, 2002. "Committees versus individuals: an experimental analysis of monetary policy decision-making," Bank of England working papers 165, Bank of England.
- Lombardelli, Clare & Proudman, James & Talbot, James, 2005. "Committees Versus Individuals: An Experimental Analysis of Monetary Policy Decision Making," MPRA Paper 823, University Library of Munich, Germany.
- Gerlach-Kristen, Petra, 2005. "Too little, too late: Interest rate setting and the costs of consensus," Economics Letters, Elsevier, vol. 88(3), pages 376-381, September.
- Hao Li & Sherwin Rosen & Wing Suen, 2000.
"Conflicts and Common Interests in Committees,"
Econometric Society World Congress 2000 Contributed Papers
0341, Econometric Society.
- Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
- Ley, E. & Steel, M.F.J., 1995.
"A model of management teams,"
1995-86, Tilburg University, Center for Economic Research.
- Eduardo Ley & Mark F J Steel, 1995. "A Model of Management Teams," ESE Discussion Papers 24, Edinburgh School of Economics, University of Edinburgh.
- Eduardo Ley & Mark F.J. Steel, 1995. "A Model of Management Teams," Others 9503001, EconWPA, revised 19 Jul 1995.
- Ley, E. & Steel, M.FJ., 1995. "A Model of Management Teams," Papers 9586, Tilburg - Center for Economic Research.
- Christopher J. Waller, 2000. "Policy Boards and Policy Smoothing," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 305-339.
- Akerlof, George A, 1991. "Procrastination and Obedience," American Economic Review, American Economic Association, vol. 81(2), pages 1-19, May.
- Alan S. Blinder & John Morgan, 2000.
"Are Two Heads Better Than One?: An Experimental Analysis of Group vs. Individual Decisionmaking,"
NBER Working Papers
7909, National Bureau of Economic Research, Inc.
- Alan S. Blinder & John Morgan, 2001. "Are Two Heads Better Than One?: An Experimental Analysis of Group vs. Individual Decisionmaking," Working Papers 130, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Mathias Dewatripont & Ian Jewitt & Jean Tirole, 1999.
"The Economics of Career Concerns, Part I: Comparing Information Structures,"
Review of Economic Studies,
Oxford University Press, vol. 66(1), pages 183-198.
- Mathias Dewatripont & Ian Jewitt & Jean Tirole, 1999. "The economics of career concerns: part 1 :comparing information structures," ULB Institutional Repository 2013/9617, ULB -- Universite Libre de Bruxelles.
- Cason, Timothy N & Mui, Vai-Lam, 1997. "A Laboratory Study of Group Polarisation in the Team Dictator Game," Economic Journal, Royal Economic Society, vol. 107(444), pages 1465-83, September.
- Alan S. Blinder, 1999. "Central Banking in Theory and Practice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522608, March.
- Gerling, Kerstin & Gruner, Hans Peter & Kiel, Alexandra & Schulte, Elisabeth, 2005.
"Information acquisition and decision making in committees: A survey,"
European Journal of Political Economy,
Elsevier, vol. 21(3), pages 563-597, September.
- Kiel, Alexandra & Gerling, Kerstin & Schulte, Elisabeth & Grüner, Hans Peter, 2003. "Information acquisition and decision making in committees: a survey," Working Paper Series 0256, European Central Bank.
- Drora Karotkin & Jacob Paroush, 2003. "Optimum committee size: Quality-versus-quantity dilemma," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 20(3), pages 429-441, 06.
- Whyte, Glen, 1993. "Escalating Commitment in Individual and Group Decision Making: A Prospect Theory Approach," Organizational Behavior and Human Decision Processes, Elsevier, vol. 54(3), pages 430-455, April.
- Sushil Bikhchandani & David Hirshleifer & Ivo Welch, 1998. "Learning from the Behavior of Others: Conformity, Fads, and Informational Cascades," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 151-170, Summer.
- Smith, Steve, 1985. "Groupthink and the Hostage Rescue Mission," British Journal of Political Science, Cambridge University Press, vol. 15(01), pages 117-123, January.
When requesting a correction, please mention this item's handle: RePEc:bla:intfin:v:9:y:2006:i:2:p:145-168. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.