Committee Decisions on Monetary Policy: Evidence From Historical Records of the Federal Open Market Committee

The dissent voting behaviour of central bankers: what do we really know?

“…For example, Chappell et al (2005) provide evidence that FOMC members not only display different intercepts for their individual reaction functions but also possess different strengths of reaction to particular economic variables.…”

“…Interestingly, Besley et al (2008) also find that levels of disagreement in the MPC are significantly lower immediately following any policy changes. Another strand of literature that reveals differences in preferences focuses on the US Federal Reserve Federal Open Market Committee (FOMC) (Chappell et al, 1997;Chappell and McGregor, 2000;Chappell et al, 2004Chappell et al, , 2005. Typically, these differences are documented through the identification of different intercepts for estimated individual reaction functions.…”

Nominal GDP futures targeting

“…Consider the difference between current monetary policy, which is made by a very small group of people relying on models developed within the Federal Reserve, and an NGDP futures regime that is open to anyone in the world. A study by economists Henry W. Chappell Jr., Rob Roy McGregor, and Todd A. Vermilyea finds much circumstantial evidence that FOMC members face subtle pressure to reach unanimous decisions (Chappell et al, 2005). Princeton economist Marco Battaglini shows that "the inefficiency in communication converges to zero as the number of experts increases, even if the whether central banks are powerless at the zero-interest-rate bound.…”

European monetary policy and the ECB rotation model

“…There are approaches that develop optimal designs from a theoretical point of view as well as assessments of existing decision rules. The optimal design of a monetary policy committee includes a definition of the optimal size, composition and voting rule (Chappell et al 2005;Gerling et al 2003). As it is out of question by now that the rotation model will be modified, and our analysis concentrates on an assessment of this rule, we will focus on the studies that also analyze the rotation model with the power index concept.…”