Working Paper: CEPR ID: DP9418
Authors: Sylvester C. W. Eijffinger; Ronald J. Mahieu; Louis Raes
Abstract: 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.
Keywords: Central Banking; Ideal Points; Voting Record
JEL Codes: C11; E58; E59
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Extreme policy preferences among external members (D72) | Higher heterogeneity in voting behavior (D72) |
| Career background of members (J44) | Median voter preference (D79) |
| Industry experience of members (L89) | More hawkish tendencies (F52) |
| Central bank experience of members (E58) | Lowest heterogeneity in policy preferences (D79) |
| Differences in revealed policy preferences (D72) | Statistical significance (C12) |
| Internal members (Y20) | More dovish tendencies compared to external members (E49) |