HARRIS, M.N. and SPENCER, C., 2009. The policy choices and reaction functions of Bank of England MPC Members. Southern Economic Journal, 76 (2), pp.482-499.
The results of an econometric exercise are presented, showing that Monetary Policy Committee
(MPC) members appointed from outside the ranks of Bank of England staff (outsiders) react
differently to forecasts of inflation and output than those appointed from within the Bank
(insiders). All results are reinforced by the well-established findings that, compared with
outsiders, insiders choose higher interest rates, are more likely to vote as a bloc, and feature on
the winning side of policy decisions more frequently. On the basis of these results, it is argued
that the current MPC framework is biased toward the policy choices of insiders.
Financial support from the Economic and Social Research Council (ESRC) is gratefully acknowledged (ESRC Postgraduate Studentship R42200134224).