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Monetary policy deliberations: committee size and voting rules

Listed author(s):
  • Vidal, Jean-Pierre
  • Maurin, Vincent
Registered author(s):

    How large should a monetary policy committee be? Which voting rule should a monetary policy committee adopt? This paper builds on Condorcet's jury threorem 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

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    File URL: https://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1434.pdf
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    Paper provided by European Central Bank in its series Working Paper Series with number 1434.

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    Date of creation: May 2012
    Handle: RePEc:ecb:ecbwps:20121434
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    1. 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.
    2. Petra Gerlach-Kristen, 2008. "The Role of the Chairman in Setting Monetary Policy: Individualistic vs. Autocratically Collegial MPCs," International Journal of Central Banking, International Journal of Central Banking, vol. 4(3), pages 119-143, September.
    3. Berk, Jan Marc & Bierut, Beata K., 2011. "Communication in a monetary policy committee," European Journal of Political Economy, Elsevier, vol. 27(4), pages 791-801.
    4. Blinder, Alan S., 2007. "Monetary policy by committee: Why and how?," European Journal of Political Economy, Elsevier, vol. 23(1), pages 106-123, March.
    5. Bauke Visser & Otto H. Swank, 2007. "On Committees of Experts," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 337-372.
    6. Alessandro Riboni & Francisco J. Ruge-Murcia, 2008. "Preference Heterogeneity in Monetary Policy Committees," International Journal of Central Banking, International Journal of Central Banking, vol. 4(1), pages 213-233, March.
    7. Hansen, Stephen & McMahon, Michael, 2011. "How Experts Decide : Identifying Preferences versus Signals from Policy Decisions," The Warwick Economics Research Paper Series (TWERPS) 963, University of Warwick, Department of Economics.
    8. Moutot, Philippe & Jung, Alexander & Mongelli, Francesco Paolo, 2008. "The working of the eurosystem: monetary policy preparations and decision-making - selected issues," Occasional Paper Series 79, European Central Bank.
    9. Farvaque, Etienne & Matsueda, Norimichi & Méon, Pierre-Guillaume, 2009. "How monetary policy committees impact the volatility of policy rates," Journal of Macroeconomics, Elsevier, vol. 31(4), pages 534-546, December.
    10. Philippe Moutot & Alexander Jung & Francesco Paolo Mongelli, 2008. "The working of the eurosystem - monetary policy preparations and decision-making – selected issues," Occasional Paper Series 79, European Central Bank.
    11. Christopher Spencer, 2005. "Consensus Formation in Monetary Policy Committees," School of Economics Discussion Papers 1505, School of Economics, University of Surrey.
    12. repec:dau:papers:123456789/7717 is not listed on IDEAS
    13. Jan Marc Berk & Beata K. Bierut, 2003. "Committee structure and its implications for Monetary policy decision-making," MEB Series (discontinued) 2003-05, Netherlands Central Bank, Monetary and Economic Policy Department.
    14. Timothy Besley & Neil Meads & Paolo Surico, 2008. "Insiders versus Outsiders in Monetary Policymaking," American Economic Review, American Economic Association, vol. 98(2), pages 218-223, May.
    15. Carl Andreas Claussen & Øistein Røisland, 2014. "The Discursive Dilemma in Monetary Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(3), pages 702-733, 07.
    16. repec:cup:apsrev:v:90:y:1996:i:01:p:34-45_20 is not listed on IDEAS
    17. Alan Kirman, 1993. "Ants, Rationality, and Recruitment," The Quarterly Journal of Economics, Oxford University Press, vol. 108(1), pages 137-156.
    18. Keiichi Morimoto, 2010. "Coordination Behavior and Optimal Committee Size," Discussion Papers in Economics and Business 10-02, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
    19. Arnab Bhattacharjee & Sean Holly, 2013. "Understanding Interactions in Social Networks and Committees," Spatial Economic Analysis, Taylor & Francis Journals, vol. 8(1), pages 23-53, March.
    20. Jan Marc Berk & Beata K. Bierut, 2005. "Communication in Monetary Policy Committees," DNB Working Papers 059, Netherlands Central Bank, Research Department.
    21. Gerardi, Dino & Yariv, Leeat, 2007. "Deliberative voting," Journal of Economic Theory, Elsevier, vol. 134(1), pages 317-338, May.
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