We thank Petra Geraats, Francisco Ruge-Murcia, Lars E. O. Svensson, and Andreas Westermark for useful comments and discussions.
The Discursive Dilemma in Monetary Policy†
Article first published online: 13 MAR 2014
© The editors of The Scandinavian Journal of Economics 2014.
The Scandinavian Journal of Economics
Volume 116, Issue 3, pages 702–733, July 2014
How to Cite
Claussen, C. A. and Røisland, Ø. (2014), The Discursive Dilemma in Monetary Policy. The Scandinavian Journal of Economics, 116: 702–733. doi: 10.1111/sjoe.12062
- Issue published online: 13 JUN 2014
- Article first published online: 13 MAR 2014
- Manuscript Accepted: JAN 2013
- Manuscript Received: SEP 2011
- Discursive dilemma;
- monetary policy;
- monetary policy committee;
- policy boards;
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.