The Discursive Dilemma in Monetary Policy

32 Pages Posted: 13 Jun 2014

See all articles by Carl Andreas Claussen

Carl Andreas Claussen

Sveriges Riksbank

Øistein Røisland

Norges Bank - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: July 2014

Abstract

The discursive dilemma implies that the decision of a board depends on whether the board votes directly on the decision (conclusion‐based procedure) or votes on the premises for the decision (premise‐based procedure). We derive results showing when the discursive dilemma might occur. Under majority voting, a discursive dilemma can occur either (i) if the relationship between the premise and the decision is non‐monotonic, or (ii) if the board members have different judgments on at least two of the premises. Normatively, a premise‐based procedure tends to give better decisions when there is disagreement on parameters of the model.

Keywords: Discursive dilemma, monetary policy, monetary policy committee, policy boards

JEL Classification: D71, E52, E58

Suggested Citation

Claussen, Carl Andreas and Røisland, Øistein, The Discursive Dilemma in Monetary Policy (July 2014). The Scandinavian Journal of Economics, Vol. 116, Issue 3, pp. 702-733, 2014, Available at SSRN: https://ssrn.com/abstract=2450349 or http://dx.doi.org/10.1111/sjoe.12062

Carl Andreas Claussen (Contact Author)

Sveriges Riksbank ( email )

Brunkebergstorg 11
SE-103 37 Stockholm
Sweden

Øistein Røisland

Norges Bank - Department of Economics ( email )

P.O. Box 1179
Oslo, N-0107
Norway
+47 22 31 67 39 (Phone)
+47 22 31 60 50 (Fax)

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