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Flexible Majority Rules for Central Banks


  • We would like to thank Hans-Peter Grüner, Volker Hahn, Hans Haller, Hans Joachim Klöckers, Wolfgang Modery, Massimo Rostagno, Markus Schaller, seminar participants in Copenhagen, Frankfurt, Heidelberg, a referee, and the editor for helpful comments and suggestions. Financial support from the German Research Foundation (DFG) is gratefully acknowledged. The views expressed in this paper are those of the author(s) and do not necessarily represent those of the German Council of Economic Experts.


We propose a flexible majority rule for central-bank committees where the size of the majority depends monotonically on the change in interest rate within a particular time frame. Small changes in the interest rate require a small share, while larger changes require a larger share of supporting votes. We show that flexible majority rules are superior to simple majority rules.