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- handle: 10670/1.qd2184
- hal: hal-02502635
- doi: 10.1016/j.jedc.2019.05.004
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info:eu-repo/semantics/altIdentifier/doi/10.1016/j.jedc.2019.05.004
Mots-clés
Central banking Committees Recession aversion Discrete choice modeling Behavioral economicsSujets proches
Loathing Disrelish Disgust Distaste Repugnance Antipathy Abhorrence Dislike Pattern Model Childhood Youngsters Pedology (Child study) Kids (Children) Bank officersCiter ce document
Etienne Farvaque et al., « Misplaced childhood: When recession children grow up as central bankers », HAL-SHS : économie et finance, ID : 10.1016/j.jedc.2019.05.004
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Résumé
We examine how much an early – i.e., childhood – experience of recession influences the behavior of central bankers. We develop a model of decision making by a committee whose leader and members exhibit recession aversion due to their personal experience. The model reveals that recession aversion could lead to a reluctance of the policymaker to increase policy rates. In a panel multinomial logit model for nine major central banks analyzed over the period 1999–2015, we find that growing-up in a recession influences monetary policy-making. Central bankers’ early personal experiences of recessions shape their policy reactions, increasing the willingness to cut policy rates, with policy-relevant magnitudes. The results are robust to alternative behavioral hypotheses, accounting for a number of control variables or sample variation.