Uncertainty and the Bank of England's MPC
We investigate how recently developed measures of uncertainty affect the voting behavior of individual Bank of England Monetary Policy Committee (MPC) members. To determine the precise impact of uncertainty on individual policymakers, we estimate the standard errors of member-specific parameters in a random parameters ordered probit framework. We find that uncertainty is typically associated with voting to ease the policy stance. The Bank of England's in-house uncertainty index plays a prominent role in driving voting behavior. Based on this measure, the MPC emerges as a diverse group of activist risk managers.
- Business and Economics
Published inJournal of Money, Credit and Banking
Pages825 - 858
- AM (Accepted Manuscript)
Rights holder© The Ohio State University
Publisher statementThis is the peer reviewed version of the following article: Chappell, H. ... et al, (2022). Uncertainty and the Bank of England's MPC. Journal of Money, Credit and Banking, 54 (4), pp.825-858, which has been published in final form at https://doi.org/10.1111/jmcb.12854. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions