The FOMC: Preferences, Voting, and Consensus

Meade, Ellen E.

doi:10.20955/r.87.93-101

Cited by 67 publications

(86 citation statements)

References 10 publications

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“…Obviously, measuring policy preferences on an individual level is difficult. Here we utilize the data set constructed by Meade (2005). 10 She uses transcripts of FOMC meetings and codes verbally stated preferences into a dummy variable that takes a value of 1 if a member favors tighter policy, -1 in case of policy easing and zero otherwise.…”

Section: Empirical Strategy and Resultsmentioning

confidence: 99%

Strategic forecasting on the FOMC

Tillmann

2011

European Journal of Political Economy

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The Federal Open Market Committee (FOMC) of the Federal Reserve consists of voting-and non-voting members. Apart from deciding about interest rate policy, members individually formulate regular inflation forecasts. This paper uncovers systematic differences in individual inflation forecasts submitted by voting and non-voting members. Based on a data set with individual forecasts recently made available it is shown that non-voters systematically overpredict inflation relative to the consensus forecast if they favor tighter policy and underpredict inflation if the favor looser policy. These findings are consistent with non-voting member following strategic motives in forecasting, i.e. non-voting members use their forecast to influence policy deliberation.

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Section: Empirical Strategy and Resultsmentioning

confidence: 99%

Strategic forecasting on the FOMC

Tillmann

2011

European Journal of Political Economy

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“…Although Chairman Greenspan was in office from 11 August 1987 to 31 January 2006, the present analysis focuses on the sample ranging from the first meeting in 1989 to the first meeting in 2006. Greenbook forecasts for inflation, GDP and unemployment and data on individual interest rate preferences from the FOMC's policy go-around are available for this sample period (see Meade, 2005). In addition, individual forecasts of FOMC members (see Romer, 2010) are currently available for the subsample ranging from 1992 to the end of 2002.…”

Section: Non-technical Summarymentioning

confidence: 99%

“…This question is interesting, because it has been argued that preferences of Reserve Bank Presidents are more persistent than those of the Governors (Meade, 2005). In addition, "while the Reserve Bank Presidents are not part of the pre-meeting discussions at the Board, they have their own devices for influencing the policy discussions in between the meetings.…”

Section: Non-technical Summarymentioning

confidence: 99%

“…When Chairman Greenspan took over in 1987, he initially faced stronger disagreement than his predecessor. Over time, however, he succeeded in bringing down this disagreement so that from 1997 onwards, the FOMC took monetary policy decisions in a highly consensual manner (see, for example, Meade, 2005;Jung, 2013). The drive towards consensus under Chairman Greenspan's tenure can be further highlighted by the fact, that during the second half of the Greenspan era, the FOMC usually took decisions by unanimity and never reported more than two dissenting votes.…”

Section: Non-technical Summarymentioning

confidence: 99%

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Does the Greenspan era provide evidence on leadership in the FOMC?

El‐Shagi

Jung

2015

Journal of Macroeconomics

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“…report that dissents represent 7.8 percent of voting observations over the 1966-96 period. According to Meade (2005), however, the FOMC's internal rates of disagreement are quite similar to dissent rates at the Bank of England, if one looks at opinions expressed during the discussion of policy proposals. decision power.…”

Section: Leader Dominance and Dissent In Monetary Policy Committeesmentioning

confidence: 99%

Overconfidence, monetary policy committees and chairman dominance

Claussen

Matsen

Røisland³

et al. 2012

Journal of Economic Behavior & Organization

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Monetary policy decisions are typically characterized by three features: (i) decisions are made by a committee, (ii) the committee members often disagree, and (iii) the chairman is almost never on the losing side in the vote. We show that the combination of overcon…dent policymakers and a chairman with agenda-setting rights can explain all these features. The optimal agenda-setting power to the chairman is a strictly concave function of the degree of overcon…dence. We also show that the quality of advice produced by the central bank sta¤ is higher in a ‡at organization than in a hierarchical one.

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The FOMC: Preferences, Voting, and Consensus

Cited by 67 publications

References 10 publications

Strategic forecasting on the FOMC

Strategic forecasting on the FOMC

Does the Greenspan era provide evidence on leadership in the FOMC?

Overconfidence, monetary policy committees and chairman dominance

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