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Monetary Policy Deliberations : Committee Size and Voting Rules

Author

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  • Vincent Maurin
  • Jean-Pierre Vidal

Abstract

How large should a monetary policy committee be ? Which voting rule should a monetary policy committee adopt ? This paper builds on Condorcet’s jury theorem to analyse the relationships between committee size and voting rules in a model where policy discussions are subject to a time constraint. It suggests that in large committees majority voting is likely to enhance policy outcomes. Under unanimity (consensus) it is preferable to limit the size of the committee. Finally, supermajority voting rules are social contrivances that contribute to policy performance in a more uncertain environment, when initial policy proposals are less likely to be correct, or when payoffs are asymmetric. JEL Classification : D71, D78, D81, E58.

Suggested Citation

  • Vincent Maurin & Jean-Pierre Vidal, 2014. "Monetary Policy Deliberations : Committee Size and Voting Rules," Recherches économiques de Louvain, De Boeck Université, vol. 80(2), pages 47-83.
    • Handle: RePEc:cai:reldbu:rel_802_0047
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    More about this item

    Keywords

    monetary policy; collective decision-making; optimal committee size; voting rules;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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