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Inflation Targeting, committee Decision Making and Uncertainty: The case of the Bank of England's MPC

  • Arnab Bhattacharjee

    (Cambridge University)

  • Sean Holly

    (Cambridge University)

Policymaking at the Bank of England has provided detailed information on both the decisions of individual members of the Monetary Policy Committee. We consider this decision making process in the context of a model in which inflation forecast targeting is used but there is heterogeneity among the members of the committee. We find that forecasts of output and inflation provide the best description of discrete changes in interest rates. We find a role for asset prices through the equity market, foreign exchange market and housing prices. There is also identifiable heterogeneity among members of the committee that improves predictabilit

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Paper provided by Money Macro and Finance Research Group in its series Money Macro and Finance (MMF) Research Group Conference 2004 with number 63.

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Date of creation: 17 Sep 2004
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Handle: RePEc:mmf:mmfc04:63
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