Elements of Optimal Monetary Policy Committee Design [electronic resource] / Jérôme Vandenbussche.
Material type: TextSeries: IMF Working Papers; Working Paper ; No. 06/277Publication details: Washington, D.C. : International Monetary Fund, 2006Description: 1 online resource (38 p.)ISBN: 1451865376 :ISSN: 1018-5941Subject(s): Analysis of Collective Decision-Making | Central Bank | Central Banking | Collective Decision Making | Inflation Targeting | Inflation | Canada | China, People's Republic of | New Zealand | United KingdomAdditional physical formats: Print Version:: Elements of Optimal Monetary Policy Committee DesignOnline resources: IMF e-Library | IMF Book Store Abstract: The move from individual decision making to committee decision making is widely seen as a major evolution in contemporary central banking. This paper reviews the relevant economics and social psychology literatures with a view to providing some insights into the question of optimal monetary policy committee design. While the preference aggregation literature points to the effect of committee structure on the extent of the time inconsistency problem and its associated costs, the belief aggregation literature analyzes how different committee structures affect the efficiency of information pooling, the process of social influence, and collective accuracy. In conclusion, we highlight the main tradeoffs that the analysis has brought to light and point to directions for future research.The move from individual decision making to committee decision making is widely seen as a major evolution in contemporary central banking. This paper reviews the relevant economics and social psychology literatures with a view to providing some insights into the question of optimal monetary policy committee design. While the preference aggregation literature points to the effect of committee structure on the extent of the time inconsistency problem and its associated costs, the belief aggregation literature analyzes how different committee structures affect the efficiency of information pooling, the process of social influence, and collective accuracy. In conclusion, we highlight the main tradeoffs that the analysis has brought to light and point to directions for future research.
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