Publication

This paper addresses the optimal size of a monetary policy committee (MPC) and thus conducts an empirical cross-country study to explore whether there is a link between the size of an MPC and inflation volatility. It gives a brief overview on previous theoretical and experimental studies on MPC size and on earlier studies of inflation volatility and presents the specification of the applied empirical model and the regression results. The authors find that countries with less than five MPC members tend to have larger deviations from trend inflation than MPCs with five or more members.