Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102150
Authors: 
Hefeker, Carsten
Zimmer, Blandine
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4933
Abstract: 
We study how the optimal degree of conservatism relates to decision-making procedures in a Monetary Policy Committee (MPC). In our framework, central bank conservatism is required to attenuate the volatility of monetary decisions generated by the presence of uncertainty about the committee members' output objective. We show how this need for conservatism varies according to the number of MPC members, the MPC's composition as well as its decision rule. Moreover, we find that extra central bank conservatism is required when there is ambiguity about the MPC's true decision rule.
Subjects: 
monetary policy committees
central bank transparency
central bank conservatism
min-max
JEL: 
D70
E52
E58
F33
Document Type: 
Working Paper

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