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Is There a Limit on FOMC Dissents? Evidence from the Greenspan Era

  • Petra Gerlach-Kristen
  • Ellen E. Meade

Dissents in the Federal Open Market Committee (FOMC) are relatively rare. Is this because policymakers late in the voting order are deterred from dissenting? Dissents became infrequent during Chairman Greenspan's tenure, arguably rejecting his growing influence. We show that policymaker dissents also were driven by the alphabetical voting order in the FOMC, the number of dissents already cast, whether the policymaker in question is a Board member, and inlation. Because dissents help forecast future changes in the Federal funds rate, this implicit constraint on dissents may be ineffcient in that it prevents the communication of useful information to financial markets.

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File URL: http://www.american.edu/cas/economics/pdf/upload/2010-16.pdf
File Function: First version, 2010-03
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Paper provided by American University, Department of Economics in its series Working Papers with number 2010-16.

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Date of creation: Mar 2010
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Handle: RePEc:amu:wpaper:2010-16
Contact details of provider: Web page: http://www.american.edu/cas/economics/

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