Flexible Majority Rules for Central Banks

29 Pages Posted: 21 Jun 2004

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Research; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Bernhard Pachl

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: May 2004

Abstract

We propose a flexible majority rule for central bank councils where the size of the majority depends monotonically on the change in interest rate within a particular time frame. Small changes in interest rate require a small share of supporting votes, even less than 50%. We show that flexible majority rules are superior to simple majority rules and can implement the optimal monetary policy under a variety of circumstances.

Keywords: Central bank, voting, majority rule, flexible majority rules

JEL Classification: D72, E52, E58, F33

Suggested Citation

Gersbach, Hans and Pachl, Bernhard, Flexible Majority Rules for Central Banks (May 2004). Available at SSRN: https://ssrn.com/abstract=557833

Hans Gersbach (Contact Author)

ETH Zurich - CER-ETH -Center of Economic Research ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Bernhard Pachl

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
16
Abstract Views
1,401
PlumX Metrics