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Monetary Policy Committees and DeGrootian Consensus

Author

Listed:
  • Christopher Spencer

    (Loughborough University)

Abstract

Reaching a decision on the policy interest-rate often requires members of a monetary policy committee (MPC) to form a consensus. To model this phenomenon, a formal deliberation mechanism that captures how committee members achieve consensus à la Morris DeGroot (1974) is employed. Numerical simulations demonstrate how DeGroot's framework informs how so-called autocratically collegial, genuinely collegial, and individualistic MPCs (Blinder, 2007) reach agreement.

Suggested Citation

  • Christopher Spencer, 2014. "Monetary Policy Committees and DeGrootian Consensus," Economics Bulletin, AccessEcon, vol. 34(2), pages 1291-1302.
    • Handle: RePEc:ebl:ecbull:eb-12-00193
    as

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    References listed on IDEAS

    as
    1. Vidal, Jean-Pierre & Maurin, Vincent, 2012. "Monetary policy deliberations: committee size and voting rules," Working Paper Series 1434, European Central Bank.
    2. Blinder, Alan S., 2007. "Monetary policy by committee: Why and how?," European Journal of Political Economy, Elsevier, vol. 23(1), pages 106-123, March.
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    4. Alessandro Riboni & Francisco J. Ruge-Murcia, 2010. "Monetary Policy by Committee: Consensus, Chairman Dominance, or Simple Majority?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 363-416.
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    6. Belden, Susan, 1989. "Policy Preferences of FOMC Members as Revealed by Dissenting Votes," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 21(4), pages 432-441, November.
    7. Mark Harris & Paul Levine & Christopher Spencer, 2011. "A decade of dissent: explaining the dissent voting behavior of Bank of England MPC members," Public Choice, Springer, vol. 146(3), pages 413-442, March.
    8. Petra Gerlach-Kristen, 2009. "Outsiders at the Bank of England's MPC," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(6), pages 1099-1115, September.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Monetary policy committees; consensus formation; deliberation;
    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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