From Doves to Hawks: A Spatial Analysis of Voting in the Monetary Policy Committee of the Bank of England, 1997-2007

LSE PSPE Working Paper No. 8

38 Pages Posted: 24 Dec 2007

See all articles by Simon Hix

Simon Hix

London School of Economics & Political Science (LSE) - Department of Government

Bjorn Hoyland

University of Oslo - Department of Political Science

Nick Vivyan

London School of Economics & Political Science (LSE) - Department of Government

Date Written: November 21, 2007

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 and Hoyland, Bjorn and Vivyan, Nick, From Doves to Hawks: A Spatial Analysis of Voting in the Monetary Policy Committee of the Bank of England, 1997-2007 (November 21, 2007). LSE PSPE Working Paper No. 8. Available at SSRN: https://ssrn.com/abstract=1078116 or http://dx.doi.org/10.2139/ssrn.1078116

Simon Hix (Contact Author)

London School of Economics & Political Science (LSE) - Department of Government ( email )

Northampton NN7 1NE
United Kingdom

Bjorn Hoyland

University of Oslo - Department of Political Science ( email )

PO Box 6706 St Olavs plass
Oslo, N-0317
Norway

Nick Vivyan

London School of Economics & Political Science (LSE) - Department of Government ( email )

Northampton NN7 1NE
United Kingdom

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