Department of Economics-Master Calendar

Abstract: We construct a new dataset of FOMCmeeting transcripts from 1966 to 1990 toanalyze the sources of heterogeneity in individual monetary policy preferences and studyhow this heterogeneity shapes policy decisions. Using these detailed discussions, wemanually quantify and characterize each FOMCparticipants’ preferred policies along withtheir reasoning and justification. We show thatparticipants' beliefs about the effects ofmonetary policy—specifically, their perceivedslope of the Phillips Curve—play a centralrole. Participants who believemonetary policy has stronger effects on real activity are morelikely to cite output as a justification for easing, while those perceiving stronger priceeffects emphasize inflation as a reason for tightening. We then show that the Chair plays aunique and powerful role in reconciling these views, not just in setting policy rates, butalso in minimizing dissent. The latter occurs because dissentersfind their ability toinfluence policy in subsequent meetings is significantly curtailed