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Publication Detailed Description
Journal Title
Review of Economics and Statistics
Year (definitive publication)
N/A
Language
English
Country
United States of America
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Abstract
We investigate how dissent in the FOMC is affected by structural macroeconomic shocks
obtained using a medium-scale DSGE model. We find that dissent is less (more) frequent when
demand (supply) shocks are the predominant source of inflation fluctuations. In addition, supply
shocks are found to raise private sector forecasting uncertainty about the path of interest rates.
Since supply shocks impose a trade-off between inflation and output stabilization while demand
shocks do not, our findings are consistent with heterogeneous preferences over the dual mandate
among FOMC members as a driver of policy disagreement.
Acknowledgements
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Keywords
FOMC,Committees,Monetary policy,Structural shocks,Dissent
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