Journal Article

Monetary Policy Committees: Individual and Collective Reputations

Anne Sibert

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 70, issue 3, pages 649-665
Published in print July 2003 | ISSN: 0034-6527
Published online July 2003 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/1467-937X.00260
Monetary Policy Committees: Individual and Collective Reputations

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  • Prices, Business Fluctuations, and Cycles
  • Monetary Policy, Central Banking, and the Supply of Money and Credit

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This paper looks at the incentives of individual members of a monetary policy committee to gain a reputation for inflationary toughness. I show a policy maker can have more or less incentive to build a reputation when part of a group. But, group policy making leads to higher expected social welfare. Not publishing individuals’ votes, raises the temptation to inflate and lowers expected social welfare. If the culture or rules of a central bank puts more weight on senior policy makers, the incentive to build a reputation is greater, but expected social welfare may be higher or lower.

Keywords: E31; E52

Journal Article.  9234 words.  Illustrated.

Subjects: Prices, Business Fluctuations, and Cycles ; Monetary Policy, Central Banking, and the Supply of Money and Credit

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