Central Banks: Inferring Hawks and Doves from voting records

This is my presentation ‘Inferring Hawks and Doves from voting records’ for Walk the Talk? Challenges for Monetary Policy in Uncertain Times, Waterloo, Ontario (download full pdf

This is the abstract from CEPR Discussion Paper No. 9418 April 2013:

In this paper we estimate spatial voting models for the analysis of the voting record of the monetary policy committee of the Bank of England. We use a flexible Bayesian approach for estimating such models. A simple modification to the standard spatial model as well as a variety of model checks are proposed to deal with the specifics of the data available.

We provide evidence that extreme policy preferences are to be found among the external members. We also consider the variation in policy preferences according to career backgrounds. The median voter preference is similar for different backgrounds, except for those with a background in the industry where the median voter is more hawkish.

The heterogeneity in policy preferences is the largest among academics and those with a background in the industry. The range of policy preferences is much smaller among other groups, in particular among monetary policy committee members with central bank experience who exhibit the lowest heterogeneity in policy preferences.

Sylvester C. W. Eijffinger, CentER and EBC, Tilburg University and CEPR
Ronald J. Mahieu, CentER and Netspar, Tilburg University
Louis Raes, CentER and EBC, Tilburg University

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