Diverse Views on Monetary Policy

Improving global governance
Feb 14, 2023 | Finance & Development

Central Bank governance has not kept pace with best practice in fostering the diversity of views by separating the roles of the board chair and chief executive officer (CEO) and by adopting procedures to ensure that every member of the Monetary Policy Committee has the same degree of influence and accountability for its decisions. While monetary policymaking requires complex real-time judgments, decision-making is too often impaired by groupthink, tokenism, and marginalization of dissenting views, suggest David Blanchflower and Andrew Levin in the IMF periodical Finance & Development. They propose a set of reforms to monetary policy committees, including greater diversity, full-time status, accountability for individual views, further steps to avoid political interference, and greater efforts to communicate clearly to the public.

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