The Dynamic Voting Patterns of the Bank of England's MPC

In this paper, we examine the dynamic voting behavior of the MPC of the Bank of England. Most prior studies of the MPC consider the average voting patterns of monetary policymakers over time, not the dynamics of the votes. Gerlach-Kristen (2003) and Spencer (2006), for example, provided evidence that the votes cast by the five internal members of the MPC differ significantly from those cast by the four external members who are not career central bankers. A close look at the time pattern of the votes reveals that internal members dissent little initially and then increase their dissents over their tenure, whereas external members dissent about one-quarter of the time during each year on the MPC. Estimation of a pooled voting panel over the 1997-2008 period provides statistical support for dynamics in voting, whether as simple tenure effects or as tenure effects on the price and output terms in the monetary policy reaction function. In particular, we find that, when the tenure effects are interacted with the type of membership, a dummy variable for the type of membership is not significant. Furthermore, internal members give greater weight to the output and price gaps the longer is their tenure on the MPC. However, in their first year on the MPC, internal and external members do not appear to vote differently.