Hansen, Stephen and McMahon, Michael (2011) How experts decide: identifying preferences versus signals from policy decisions. CEP Discussion Papers (CEPDP1063). London School of Economics and Political Science. Centre for Economic Performance, London, UK.
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Abstract
A large theoretical literature assumes that experts di ffer in terms of preferences and the distribution of their private signals, but the empirical literature to date has not separately identi ed them. This paper proposes a novel way of doing so by relating the probability a member chooses a particular policy decision to the prior belief that it is correct. We then apply this methodology to study diff erences between internal and external members on the Bank of England's Monetary Policy Committee. Using a variety of proxies for the prior, we provide evidence that they di ffer significantly on both dimensions.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | https://cep.lse.ac.uk/_new/publications/discussion... |
| Additional Information: | © 2011 The Author(s) |
| Divisions: | Economics Centre for Economic Performance |
| Subjects: | H Social Sciences > HC Economic History and Conditions |
| JEL classification: | D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D81 - Criteria for Decision-Making under Risk and Uncertainty D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy (Targets, Instruments, and Effects) |
| Date Deposited: | 05 Mar 2024 13:57 |
| Last Modified: | 16 May 2024 12:34 |
| URI: | http://eprints.lse.ac.uk/id/eprint/121717 |
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