Preference Heterogeneity in Monetary Policy Committees

19 Pages Posted: 6 Feb 2010

See all articles by Alessandro Riboni

Alessandro Riboni

Ecole Polytechnique, Paris - Laboratoire d'Econometrie

Francisco J. Ruge-Murcia

McGill University - Department of Economics; University of Montreal - Department of Economics; University of Montreal - Center for Interuniversity Research in Econometrics

Date Written: October 2007

Abstract

This short paper employs individual voting records of the Monetary Policy Committee (MPC) of the Bank of England to study heterogeneity in policy preferences among committee members. The analysis is carried out using a simple generalization of the standard Neo Keynesian framework that allows members to differ in the weight they give to output compared with inflation stabilization and in their views regarding optimal inflation and natural output. Results indicate that, qualitatively, MPC members are fairly homogeneous in their policy preferences, but that there are systematic quantitative differences in their policy reaction functions that are related to the nature of their membership and career background.

Keywords: Committees, reaction functions, Bank of England

JEL Classification: E4, E5, D7

Suggested Citation

Riboni, Alessandro and Ruge-Murcia, Francisco J., Preference Heterogeneity in Monetary Policy Committees (October 2007). Available at SSRN: https://ssrn.com/abstract=1548069 or http://dx.doi.org/10.2139/ssrn.1548069

Alessandro Riboni

Ecole Polytechnique, Paris - Laboratoire d'Econometrie ( email )

1 rue Descartes
Paris, 75005
France

Francisco J. Ruge-Murcia (Contact Author)

McGill University - Department of Economics ( email )

855 Sherbrooke Street West
Montreal, QC H3A 2T7
Canada

University of Montreal - Department of Economics ( email )

C.P. 6128, succursale Centre-Ville
Montreal, Quebec H3C 3J7
Canada

University of Montreal - Center for Interuniversity Research in Econometrics ( email )

C.P. 6128, Succursale Centre-ville
Montreal, Quebec H3C 3J7
Canada

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