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Outsiders at the Bank of England's MPC

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  • PETRA GERLACH‐KRISTEN

Abstract

The monetary policy committee (MPC) of the Bank of England consists of five internal and four external members. We study the voting record and show that outsiders dissent more often than insiders and tend to prefer lower rates, especially during economic downturns. Moreover, dissents by outsiders help forecast future interest rate changes, in contrast to dissents by insiders. A model in which outsiders in contrast to insiders are “recession averse” and more uncertain regarding the appropriate level of interest rates replicates the observed voting pattern well.

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  • 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.
    • Handle: RePEc:wly:jmoncb:v:41:y:2009:i:6:p:1099-1115
    DOI: 10.1111/j.1538-4616.2009.00248.x
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