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Conventional and Unconventional Votes: A Tale of Three Monetary Policy Committees

Author

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  • Christopher Spencer

    (School of Business and Economics, Loughborough University)

Abstract

Following the 2008 global financial crisis, short-term interest rates in a number of major economies reached the effective zero-lower bound (ZLB), joining Japan, which has experienced prolonged deflation and virtually zero interest-rates since 1998. In such a low policy interest-rate environment, members of monetary policy committees no longer vote solely on the level of the policy-rate, but measures which are commonly described as being `unconventional'. Focussing on the experience of the United States FOMC, the Bank of Japan's Policy Board, and the Bank of England's MPC, the drivers of dissent voting behavior under conventional and unconventional monetary policy regimes are modeled. Among our findings, we show that relative to conventional policy regimes, committee members voting in unconventional regimes who are (i) directly appointed by the government, and (ii) appointed in periods during which left-wing governments are in power, are more likely to dissent on the side of monetary ease. Put another way, the decision to dissent is partially governed by whether the monetary policy regime is a conventional or an unconventional one.

Suggested Citation

  • Christopher Spencer, 2014. "Conventional and Unconventional Votes: A Tale of Three Monetary Policy Committees," Discussion Paper Series 2014_11, Department of Economics, Loughborough University, revised Dec 2014.
  • Handle: RePEc:lbo:lbowps:2014_11
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    References listed on IDEAS

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    More about this item

    Keywords

    quantitative easing; conventional and unconventional monetary policy regimes; dissent voting; monetary policy committees; panel data; career characteristics.;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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