Too Many Cooks? Committees in Monetary Policy
31 Pages Posted: 9 Apr 2008
There are 2 versions of this paper
Too Many Cooks? Committees in Monetary Policy
Too Many Cooks? Committees in Monetary Policy
Date Written: April 1, 2008
Abstract
How many people should decide about monetary policy? In this paper, we take an empirical perspective on this issue, analyzing the relationship between the number of monetary policy decision-makers and monetary policy outcomes. Using a new data set that characterizes Monetary Policy Committees (MPCs) in more than 30 countries from 1960 through 2000, we find a U-shaped relation between the membership size of MPCs and inflation; our results suggest that the lowest level of inflation is reached at MPCs with about seven to ten members. Similar results are obtained for other measures, such as inflation variability and output growth. We also find that MPC size influences the success of monetary targeting regimes. In contrast, there is no evidence that either turnover rates of MPC members or the membership composition of MPCs affect economic outcomes.
Keywords: central bank design, monetary policy committee, central bank board, central bank council, governance, inflation
JEL Classification: E52, E58, E61
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Information Acquisition and Decision Making in Committees: A Survey
By Kerstin Gerling, H. P. Gruner, ...
-
By Bauke Visser and Otto H. Swank
-
Conflicts and Common Interests in Committees
By Li Hao, Sherwin Rosen, ...
-
Conflicts and Common Interests in Committees
By Li Hao, Sherwin Rosen, ...
-
By Anne Sibert
-
Credibility and Flexibility with Monetary Policy Committees
By Ilian Mihov and Anne Sibert
-
On the Composition of Committees
By Klaas J. Beniers and Otto H. Swank
-
An Experimental Study of Jury Deliberation
By Jacob K. Goeree and Leeat Yariv
-
Central Bank Boards Around the World: Why Does Membership Size Differ?
By Helge Berger, Volker Nitsch, ...