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Dissent in Monetary Policy Decisions

Author

Listed:
  • Alessandro Riboni

    (Department of Economics, University of Montreal)

  • Francisco J. Ruge-Murcia

    (Department of Economics, University of Montreal and Rimini Centre for Economic Analysis (RCEA))

Abstract

Voting records indicate that dissents in monetary policy committees are frequent and predictability regressions show that they help forecast future policy decisions. In order to study whether the latter relation is causal, we construct a model of committee decision making and dissent where members' decisions are not a function of past dissents. The model is estimated using voting data from the Bank of England and the Riksbank. Stochastic simulations show that the decision-making frictions in our model help account for the predictive power of current dissents. The effect of institutional characteristics and structural parameters on dissent rates is examined using simulations as well.

Suggested Citation

  • Alessandro Riboni & Francisco J. Ruge-Murcia, 2011. "Dissent in Monetary Policy Decisions," Working Paper series 27_11, Rimini Centre for Economic Analysis.
  • Handle: RePEc:rim:rimwps:27_11
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    References listed on IDEAS

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    More about this item

    Keywords

    Committees; voting models; political economy of central banking;
    All these keywords.

    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

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