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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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    Citations

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    Cited by:

    1. Jung, Alexander, 2016. "Have minutes helped to predict fed funds rate changes?," Journal of Macroeconomics, Elsevier, vol. 49(C), pages 18-32.
    2. Greene, William H. & Gillman, Max & Harris, Mark N. & Spencer, Christopher, 2013. "The Tempered Ordered Probit (TOP) Model with an Application to Monetary Policy," CEI Working Paper Series 2013-04, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    3. Ruge-Murcia, Francisco & Riboni, Alessandro, 2017. "Collective versus individual Decision-Making: A case study of the Bank of Israel Law," European Economic Review, Elsevier, vol. 93(C), pages 73-89.
    4. Eichler, Stefan & Lähner, Tom & Noth, Felix, 2016. "Regional Banking Instability and FOMC Voting," Annual Conference 2016 (Augsburg): Demographic Change 145803, Verein für Socialpolitik / German Economic Association.
    5. Jung, Alexander, 2016. "Have FOMC minutes helped markets to predict FED funds rate changes?," Working Paper Series 1961, European Central Bank.
    6. Hamza Bennani, 2012. "National influences inside the ECB: an assessment from central bankers' statements," Working Papers hal-00992646, HAL.
    7. Belderbos, Rene & Ikeuchi, Kenta & Fukao, Kyoji & Kim, Young Gak & Kwon, Hyeog Ug, 2013. "Plant Productivity Dynamics and Private and Public R&D Spillovers: Technological, Geographic and Relational Proximity," CEI Working Paper Series 2013-05, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    8. Detmers, Gunda-Alexandra, 2016. "Forward Guidance under Disagreement - Evidence from the Fed’s dot projections," Annual Conference 2016 (Augsburg): Demographic Change 145768, Verein für Socialpolitik / German Economic Association.
    9. David-Jan Jansen & Richhild Moessner, 2016. "Communicating dissent on monetary policy: Evidence from central bank minutes," DNB Working Papers 512, Netherlands Central Bank, Research Department.
    10. Jung, Alexander & El-Shagi, Makram, 2015. "Has the publication of minutes helped markets to predict the monetary policy decisions of the Bank of England's MPC?," Working Paper Series 1808, European Central Bank.
    11. Roman Horvath & Katerina Smidkova & Jan Zapal, 2012. "Is the U.S. Fed Voting Record Informative about Future Monetary Policy?," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 62(6), pages 478-484, December.
    12. Horváth, Roman & Jonášová, Júlia, 2015. "Central banks' voting records, the financial crisis and future monetary policy," European Journal of Political Economy, Elsevier, vol. 38(C), pages 229-243.
    13. Carlos Madeira & Joao Madeira, 2015. "Dissent in FOMC Meeting and the Announcement Drift," Working Papers Central Bank of Chile 749, Central Bank of Chile.
    14. El-Shagi, Makram & Jung, Alexander, 2015. "Have minutes helped markets to predict the MPC's monetary policy decisions?," European Journal of Political Economy, Elsevier, vol. 39(C), pages 222-234.

    More about this item

    Keywords

    Committees; voting models; political economy of central banking;

    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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