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Membership Turnover and Policy Disagreement at the FOMC

Author

Listed:
  • Alessandro Riboni

    (IP Paris - Institut Polytechnique de Paris)

  • Francisco Ruge-Murcia

    (McGill University = Université McGill [Montréal, Canada])

Abstract

This paper examines the implications of turnover for decision-making by the Federal Open Market Committee (FOMC). The analysis is based on a voting model where 1) the chair has agenda-setting powers but must secure the median's approval for her proposal to pass, and 2) the identity of the median changes stochastically over time through voting-right rotation and partisan appointments. The method-of-moments estimation of the model using data from 274 FOMC meetings delivers estimates of the chair and median preference parameters along a dovish-hawkish scale and of their disagreement in each meeting in the sample. Results indicate that disagreement increases the probability of dissents and policy inertia, but that turnover does not increase the volatility of interest rate adjustments.

Suggested Citation

  • Alessandro Riboni & Francisco Ruge-Murcia, 2025. "Membership Turnover and Policy Disagreement at the FOMC," Working Papers hal-05229751, HAL.
    • Handle: RePEc:hal:wpaper:hal-05229751
    Note: View the original document on HAL open archive server: https://cnrs.hal.science/hal-05229751v1
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    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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