Too many cooks? Committees in monetary policy

Arbeitspapier

How many people should decide about monetary policy? In this paper, we take an empirical perspective on this issue, analyzing the relationship between the number of monetary policy decisionmakers and monetary policy outcomes. Using a new data set that characterizes Monetary Policy Committees (MPCs) in more than 30 countries from 1960 through 2000, we find a U-shaped relation between the membership size of MPCs and inflation; our results suggest that the lowest level of inflation is reached at MPCs with about seven to ten members. Similar results are obtained for other measures, such as inflation variability and output growth. We also find that MPC size influences the success of monetary targeting regimes. In contrast, there is no evidence that either turnover rates of MPC members or the membership composition of MPCs affect economic outcomes.

Object Details

• ISBN: 3938369795
• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Diskussionsbeiträge ; No. 2008/8

Classification and Topics

• Classification: Wirtschaft ; Monetary Policy ; Central Banks and Their Policies ; Policy Objectives; Policy Designs and Consistency; Policy Coordination
• Subject: Central bank design ; monetary policy committee ; central bank board ; central bank council ; governance ; inflation. ; Zentralbank ; Geldpolitik ; Gruppenentscheidung ; Inflationsbekämpfung ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Berger, Helge ; Nitsch, Volker
• Event: Veröffentlichung
• (who): Freie Universität Berlin, Fachbereich Wirtschaftswissenschaft
• (where): Berlin
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/28074
• Last update: 10.03.2025, 11:42 AM CET