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Title: Hawks and Doves at the FOMC

Author(s): Sylvester C W Eijffinger, Ronald J Mahieu and Louis Raes

Publication Date: February 2015

Keyword(s): central banks, committees, FOMC, ideal points and transcripts

Programme Area(s): International Macroeconomics

Abstract: In this paper we estimate ideal points of Bank Presidents and Board Governors at the FOMC. We use stated preferences from FOMC transcipts and estimate a hierarchical spatial voting model. We find a clear difference between the average Board Governor and Bank President. We find little evidence for difference in ideal points according to the appointing president in case of Bank Governors. Similarly career background has no clear effect on the ideal points. We find that the median ideal point at the FOMC has been fairly stable over our sample period (1989-2007) emphasizing the lack of a political appointment channel. We also show that there was considerable variation in the median ideal point of Bank Presidents and Board Governors, but that these seem to cancel each other out. Also the dispersion of opinions (the spread between the lowest and highest ideal point) varies over time, suggestion variation in agreement at the FOMC.

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Bibliographic Reference

Eijffinger, S, Mahieu, R and Raes, L. 2015. 'Hawks and Doves at the FOMC'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=10442