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Title:Monetary policy committees in action: Is there room for improvement? PDF Logo
Authors:Maier, Philipp
Issue Date:2007
Series/Report no.:Bank of Canada Working Paper 2007,6
Abstract:More than 80 central banks use a committee to take monetary policy decisions. The composition of the committee and the structure of the meeting can affect the quality of the decision making. In this paper we review economic, experimental, sociological and psychological studies to identify criteria for the optimal institutional setting of a monetary committee. These include the optimal size of the committee, measures to encourage independent thinking, a relatively informal structure of the meeting, and abilities to identify and evaluate individual members' performances. Using these criteria, we evaluate the composition and operation of monetary policy committees in various central banks. Our findings indicate that e.g. the monetary policy committee of the Bank of England follows committee best-practice, while the committee structure of other major central banks could be improved.
Subjects:Central bank research
Monetary policy framework
JEL:C92
D70
E58
Document Type:Working Paper
Appears in Collections:Bank of Canada Working Papers

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