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The Discursive Dilemma in Monetary Policy

Author

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  • Carl Andreas Claussen
  • Øistein Røisland

Abstract

The discursive dilemma implies that the decision of a board depends on whether the board votes directly on the decision (conclusion-based procedure) or votes on the premises for the decision (premise-based procedure). We derive results showing when the discursive dilemma might occur. Under majority voting, a discursive dilemma can occur either (i) if the relationship between the premise and the decision is non-monotonic, or (ii) if the board members have different judgments on at least two of the premises. Normatively, a premise-based procedure tends to give better decisions when there is disagreement on parameters of the model.

Suggested Citation

  • Carl Andreas Claussen & Øistein Røisland, 2014. "The Discursive Dilemma in Monetary Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 116(3), pages 702-733, July.
    • Handle: RePEc:bla:scandj:v:116:y:2014:i:3:p:702-733
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    File URL: http://hdl.handle.net/10.1111/sjoe.12062
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    Cited by:

    1. Lars E. O. Svensson, 2011. "Practical Monetary Policy: Examples from Sweden and the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 42(2 (Fall)), pages 289-352.
    2. Vidal, Jean-Pierre & Maurin, Vincent, 2012. "Monetary policy deliberations: committee size and voting rules," Working Paper Series 1434, European Central Bank.
    3. Lars E. O. Svensson, 2011. "Practical Monetary Policy: Examples from Sweden and the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 289-352.

    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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