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Power‐Sharing in Monetary Policy Committees: Evidence from the United Kingdom and Sweden
Author(s) -
CHAPPELL HENRY W.,
MCGREGOR ROB ROY,
VERMILYEA TODD A.
Publication year - 2014
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/jmcb.12121
Subject(s) - governor , typology , monetary policy , estimation , kingdom , power sharing , power (physics) , economics , political science , actuarial science , public administration , accounting , macroeconomics , management , engineering , sociology , paleontology , physics , quantum mechanics , biology , anthropology , aerospace engineering
Committees may make better monetary policy decisions than individuals; however, the benefits of group decision making could be lost if committee members cede power to a chairman. We develop an econometric model to describe intracommittee power‐sharing across members. Estimation of the model permits us to classify monetary policy committees into the typology developed by Blinder ([Blinder, Alan, 2004], [Blinder, Alan, 2007]). We estimate our model for the United Kingdom's Bank of England (BOE) and Sweden's Riksbank. Results for the BOE suggest that the Governor has little influence over other committee members, while those for the Riksbank indicate that the Governor is highly influential.