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From doves to hawks: a spatial analysis of voting in the Monetary Policy Committee of the Bank of England, 1997-2007

Hix, Simon, Hoyland, Bjorn and Vivyan, Nick (2007) From doves to hawks: a spatial analysis of voting in the Monetary Policy Committee of the Bank of England, 1997-2007. PSPE working papers, 08-2007. Department of Government, London School of Economics and Political Science, London, UK.

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Abstract

This paper examines the making of UK monetary policy between 1997 and 2007 using an analysis of voting behaviour in the Bank of England’s Monetary Policy Committee (MPC). We use a Bayesian method to estimate the interest rate policy preferences of the MPC members on a ‘dove-hawk’ scale. Then, by comparing the ‘ideal points’ of outgoing members with their successors, we find evidence that MPC composition complements the fiscal policies pursued by the government. The revealed preferences of the MPC members suggest three distinct groups; ‘the doves’, who favour lower interest rates than the median committee member; ‘the centrists’, whose revealed preferences are in line with the median committee member; and ‘the hawks’, who favour higher interest rates than the median committee member. Our analysis suggests that the ‘opposition’ to the centrist group changes from the doves to the hawks as the spending policies of the government ceased to be constrained by the 1997 electoral promise to maintain conservative spending plans.

Item Type: Monograph (Working Paper)
Official URL: http://www2.lse.ac.uk/government/PSPE/WorkingPaper...
Additional Information: © 2007 The Authors
Library of Congress subject classification: J Political Science > JC Political theory
H Social Sciences > HJ Public Finance
Sets: Departments > Government
Research centres and groups > Political Science and Political Economy Group
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 08-2007
Date Deposited: 15 Sep 2009 08:28
URL: http://eprints.lse.ac.uk/25199/

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