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.:
- 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.
- Hao Li & Sherwin Rosen & Wing Suen, 2001.
"Conflicts and Common Interests in Committees,"
American Economic Review,
American Economic Association, vol. 91(5), pages 1478-1497, December.
- Hao Li & Sherwin Rosen & Wing Suen, 1999. "Conflicts and Common Interests in Committees," NBER Working Papers 7158, National Bureau of Economic Research, Inc.
- Hao Li & Sherwin Rosen & Wing Suen, 2000. "Conflicts and Common Interests in Committees," Econometric Society World Congress 2000 Contributed Papers 0341, Econometric Society.
- 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.
- Eduardo Ley & Mark F.J. Steel, 1998. "A model of management teams," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 19(6), pages 355-363.
- 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.
- Ley, E. & Steel, M.F.J., 1995. "A model of management teams," Discussion Paper 1995-86, Tilburg University, Center for Economic Research.
- Akerlof, George A, 1991. "Procrastination and Obedience," American Economic Review, American Economic Association, vol. 81(2), pages 1-19, May.
- 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 & 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.
- 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.
- 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.
- Gerling, Kerstin & Grüner, Hans Peter & Kiel, Alexandra & Schulte, Elisabeth, 2003. "Information acquisition and decision making in committees: a survey," Working Paper Series 256, 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.
- 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.
- Sah, Raaj Kumar & Stiglitz, Joseph E, 1988. "Committees, Hierarchies and Polyarchies," Economic Journal, Royal Economic Society, vol. 98(391), pages 451-470, June.
- Christopher J. Waller, 2000. "Policy Boards and Policy Smoothing," The Quarterly Journal of Economics, Oxford University Press, vol. 115(1), pages 305-339.
- 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..
- Alan S. Blinder, 1999. "Central Banking in Theory and Practice," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522608, January.
- 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 1465-1483, September.
- Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
- 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. Full references (including those not matched with items on IDEAS)
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.