The Discursive Dilemma in Monetary Policy


  • We thank Petra Geraats, Francisco Ruge-Murcia, Lars E. O. Svensson, and Andreas Westermark for useful comments and discussions.


The discursive dilemma implies that the decision of a board depends on whether the board votes directly on the decision (conclusion-based procedure) or votes on the premises for the decision (premise-based procedure). We derive results showing when the discursive dilemma might occur. Under majority voting, a discursive dilemma can occur either (i) if the relationship between the premise and the decision is non-monotonic, or (ii) if the board members have different judgments on at least two of the premises. Normatively, a premise-based procedure tends to give better decisions when there is disagreement on parameters of the model.