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Uncertainty and the Bank of England's MPC

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  • HENRY W. CHAPPELL
  • WILLIAM GREENE
  • MARK N. HARRIS
  • CHRISTOPHER SPENCER

Abstract

We investigate how recently developed measures of uncertainty affect the voting behavior of individual Bank of England Monetary Policy Committee (MPC) members. To determine the precise impact of uncertainty on individual policymakers, we estimate the standard errors of member‐specific parameters in a random parameters ordered probit framework. We find that uncertainty is typically associated with voting to ease the policy stance. The Bank of England's in‐house uncertainty index plays a prominent role in driving voting behavior. Based on this measure, the MPC emerges as a diverse group of activist risk managers.

Suggested Citation

  • Henry W. Chappell & William Greene & Mark N. Harris & Christopher Spencer, 2022. "Uncertainty and the Bank of England's MPC," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 54(4), pages 825-858, June.
    • Handle: RePEc:wly:jmoncb:v:54:y:2022:i:4:p:825-858
    DOI: 10.1111/jmcb.12854
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