Monetary policy rules and the ECB rotation model

Abstract

In this article, we apply three different specifications of a monetary policy rule to reveal the interest rate preferences of the national central bank governors of the euro area. These preferences are combined with information from the ECB rotation model to determine whether a central bank governor was allowed to vote at a certain meeting. Finally, we empirically test whether non-voting governors or specific countries are worse off when not allowed to vote compared to a situation where they have a voting right. Our results indicate that there are only very few occasions where this is indeed the case. Thus, we conclude that the current form of the rotation model in the euro area does not discriminate any national governor or country.