Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/57285 
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper No. 3782
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We first establish that policymakers on the Bank of England's Monetary Policy Committee choose lower interest rates with experience. We then reject increasing confidence in private information or learning about the structure of the macroeconomy as explanations for this shift. Instead, a model in which voters signal their hawkishness to observers better fits the data. The motivation for signalling is consistent with wanting to control inflation expectations, but not career concerns or pleasing colleagues. There is also no evidence of capture by industry. The paper suggests that policy-motivated reputation building may be important for explaining dynamics in experts' policy choices.
Subjects: 
signalling
learning
monetary policy
JEL: 
D78
E52
Document Type: 
Working Paper
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