Classifying the preferences of members of policy committees has been a topic of intense debate and research. This column presents spatial analysis of the preferences of the Federal Open Market Committee (FOMC) members using transcripts from meetings. The results indicate that a political appointment channel was not active or effective, and there is little effect of career experiences. The overall lack of systemic preference among FOMC members is a reassuring with regard to the institutional design of the FOMC.
Sylvester Eijffinger, Ronald Mahieu, Louis Raes, Thursday, April 23, 2015 - 00:00
Stephen Golub, Ayse Kaya, Michael Reay, Monday, September 8, 2014 - 00:00
Stephen Hansen, Michael McMahon, Andrea Prat, Friday, June 20, 2014 - 00:00
Central bank transparency is essential to democratic accountability. Central bankers often limit it – fearing its stifling effect on frank debate. Yet transparency may induce monetary policy committee members to be better prepared. This column discusses evidence showing that the ‘better prepared’ effect is important empirically. Exploiting a natural experiment in the Fed Open Market Committee in 1993 – and using computational linguistics tools to measure the impact of transparency on deliberation – the research shows that the net effect is a more informative deliberation process.