Working Paper: CEPR ID: DP2328
Authors: Anne Sibert
Abstract: This paper looks at how the reputation of a monetary policy-making committee is jointly determined with the reputations of its individual members. I ask whether individuals have more or less incentive to gain a reputation for being tough on inflation when they are part of a group. I examine the effect of increased transparency - in the form of publishing the votes of individual members - on individuals' incentives to appear hard nosed. I look at how other institutional features of central banks affect the policy making body's incentive to refrain from inflation.
Keywords: reputation; collective decision-making; central banks
JEL Codes: D71; E50; E58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| future orientation (D15) | reputation building (M14) |
| hawk preference (Y50) | reputation building (M14) |
| culture of central banks (E58) | incentive for doves to appear tough on inflation (E31) |
| monetary policy by committee (E52) | lower inflation (E31) |
| monetary policy by committee (E52) | higher welfare (I31) |
| not publishing votes (Y70) | higher inflation (E31) |
| not publishing votes (Y70) | lower social welfare (D69) |
| institutional features (D02) | policymaking incentives (D72) |
| dissension within committee (D70) | higher compromise inflation (E31) |