What’s in a Second Opinion? Shadowing the ECB and the Bank of England

47 Pages Posted: 31 Jul 2012

See all articles by Pierre L. Siklos

Pierre L. Siklos

Wilfrid Laurier University - School of Business & Economics; Balsillie school of international affairs

Matthias Neuenkirch

University of Trier - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: June 1, 2012

Abstract

The European Central Bank (ECB) and the Bank of England (BoE) are shadowed by professionals and academic economists who provide a separate policy rate recommendation in advance of the central bank’s announcement. We explore differences between shadow and actual committee decisions based on an adapted Taylor rule and report a few systematic differences especially in the case of euro area shadow committee when the data are disaggregated according to the background of the shadow members, and when the member’s country of origin is considered. The shadow committee of the ECB also tends to be relatively less inflation averse than its UK counterpart, at least vis‐á‐vis the respective policy making bodies. Perhaps most significantly our interpretation of the stance of the shadow committees is sensitive to the use of real time data.

Keywords: monetary policy committees, Taylor rules, central bank communication

JEL Classification: E52, E58, E61, E69

Suggested Citation

Siklos, Pierre L. and Neuenkirch, Matthias, What’s in a Second Opinion? Shadowing the ECB and the Bank of England (June 1, 2012). Paolo Baffi Centre Research Paper No. 2012-123, Available at SSRN: https://ssrn.com/abstract=2120366 or http://dx.doi.org/10.2139/ssrn.2120366

Pierre L. Siklos (Contact Author)

Wilfrid Laurier University - School of Business & Economics ( email )

Department of Economics
75 University Avenue W.
Waterloo, Ontario N2L 3C5
Canada
519-884-0710 Ext.. 3491 (Phone)

HOME PAGE: http://pierrelsiklos.com

Balsillie school of international affairs ( email )

67 Erb Street West
Waterloo, ON N2L 6C2
Canada

Matthias Neuenkirch

University of Trier - Faculty of Economics ( email )

Universitätsring 15
Trier, 54296
Germany
+49 - (0)651 - 201 - 2629 (Phone)

HOME PAGE: http://www.uni-trier.de/index.php?id=50130

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

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