The use of staff policy recommendations in central banks
The focus of this paper is on the use of staff policy recommendations in central banks. Based on the responses to a recent survey conducted by the Bank of International Settlements, the paper tries to answer two questions. (1) How (to what extent) do central bank decision-makers make use of staff views regarding the appropriate policy? (2) What institutional features determine the extent to which staff policy views are utilised by decision-makers? The ‘weight’ with which staff policy views are taken into account is proxied by how explicitly they are presented to the policy board. Based on the survey responses about how staff policy views are presented, a Staff Recommendation Explicitness Index (SREI) is constructed for each central bank surveyed. SREI is then regressed on a number of candidate explanatory variables. The results suggest that the use of staff policy views, proxied by SREI, is negatively related to the size of the policy committee. Furthermore, the use of staff policy views seems more pronounced if the committee is consensus-seeker and if the monetary regime is inflation targeting. Tentative explanations are offered for each of these findings.
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- Bank for International Settlements, 2008. "Monetary policy decisions: preparing the inputs and communicating the outcomes," BIS Papers, Bank for International Settlements, number 37, 5.
- Helge Berger & Volker Nitsch & Tonny Lybek, 2007.
"Central Bank Boards around the World: Why does Membership Size Differ?,"
CESifo Working Paper Series
1897, CESifo Group Munich.
- Berger, Helge & Nitsch, Volker & Lybek, Tonny, 2008. "Central bank boards around the world: Why does membership size differ?," European Journal of Political Economy, Elsevier, vol. 24(4), pages 817-832, December.
- Berger, Helge & Nitsch, Volker & Lybek, Tonny, 2008. "Central Bank boards around the world: Why does membership size differ?," Discussion Papers 2008/5, Free University Berlin, School of Business & Economics.
- Helge Berger & Tonny Lybek & Volker Nitsch, 2006. "Central Bank Boards Around the World; Why Does Membership Size Differ?," IMF Working Papers 06/281, International Monetary Fund.
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