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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
The Role of the Bias in Crafting Consensus: Fomc Decision Making in the Greenspan Era

The Role of the Bias in Crafting Consensus: Fomc Decision Making in the Greenspan Era

Chappell, Jr. Henry W.
McGregor, Rob Roy
International Journal of Central Banking

Paperback

General Political Science

ISBN10: 1249560454
ISBN13: 9781249560456
Publisher: Bibliogov
Published: Sep 27 2012
Pages: 26
Weight: 0.15
Height: 0.05 Width: 7.44 Depth: 9.69
Language: English
We examine the role of the bias associated with a monetary policy directive - wording in the directive that concerns possible policy shifts in the period between one FOMC meeting and the next - in FOMC decision making in the Greenspan years. Previous studies have suggested that the bias provided the Chairman a tool for orchestrating Committee consensus. Our evidence shows that when the bias had meaningful implications for intermeeting funds rate changes (1987-92), it influenced voting by FOMC members. Biases both provoked and discouraged dissents, depending on the direction of the bias and the preferences of individual Committee members. When the bias did not have meaningful implications for intermeeting policy adjustments (1993-99), we find no evidence that it affected members' voting choices. Overall, our results are consistent with the view that FOMC members voted on the basis of a rational assessment of the policy content of proposed directives.

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