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From doves to hawks: a spatial analysis of voting in the Monetary Policy Committee of the Bank of England, 1997-2007

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  • Hix, Simon
  • Hoyland, Bjorn
  • Vivyan, Nick

Abstract

This paper examines the making of UK monetary policy between 1997 and 2007 using an analysis of voting behaviour in the Bank of England’s Monetary Policy Committee (MPC). We use a Bayesian method to estimate the interest rate policy preferences of the MPC members on a ‘dove-hawk’ scale. Then, by comparing the ‘ideal points’ of outgoing members with their successors, we find evidence that MPC composition complements the fiscal policies pursued by the government. The revealed preferences of the MPC members suggest three distinct groups; ‘the doves’, who favour lower interest rates than the median committee member; ‘the centrists’, whose revealed preferences are in line with the median committee member; and ‘the hawks’, who favour higher interest rates than the median committee member. Our analysis suggests that the ‘opposition’ to the centrist group changes from the doves to the hawks as the spending policies of the government ceased to be constrained by the 1997 electoral promise to maintain conservative spending plans.

Suggested Citation

  • Hix, Simon & Hoyland, Bjorn & Vivyan, Nick, 2007. "From doves to hawks: a spatial analysis of voting in the Monetary Policy Committee of the Bank of England, 1997-2007," LSE Research Online Documents on Economics 25199, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:25199
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    References listed on IDEAS

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    Cited by:

    1. Timothy Besley & Neil Meads & Paolo Surico, 2008. "Insiders versus Outsiders in Monetary Policymaking," American Economic Review, American Economic Association, vol. 98(2), pages 218-223, May.
    2. Arnab Bhattacharjee & Sean Holly, 2010. "Rational Partisan Theory, Uncertainty, And Spatial Voting: Evidence For The Bank Of England'S Mpc," Economics and Politics, Wiley Blackwell, vol. 22(2), pages 151-179, July.

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    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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