Supply shocks drive greater dissent on FOMC – BIS paper
Tougher trade-offs appear to reveal differences in policy-maker preferences, authors say
Members of the Federal Open Market Committee (FOMC) are more likely to dissent from the policy decision when responding to a supply shock, new research finds.
The Bank for International Settlements working paper explores how different structural shocks affect decisions by US Federal Reserve policy-makers. Authors Carlos Madeira, João Madeira and Paulo Santos Monteiro categorise shocks based on whether they are supply driven, demand driven, or the result of monetary policy decisions themselves.
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