رای گیری در سیاست های پولی در شورای بانک مرکزی اروپا

This paper challenges the received view that, from the monetary policy standpoint, EMU is a sure loss since participating countries relinquish a useful stabilisation instrument with no credibility benefit if they are equally averse to inflation. The single European monetary policy is decided by majority voting within the Council of the European Central Bank—a collegiate body consisting of the members of the Executive Board and the governors of the participating countries who are assumed to entertain Union-wide and national stabilisation objectives, respectively. The incentive structure originating from repeated voting and conflicting national interests provides an effective commitment device that reduces the inflationary bias and can offset the welfare loss due to the poorer stabilisation performance of the single monetary policy. However, this common advantage may well be accompanied by a very unequal distribution across countries of the stabilisation benefits from the single monetary policy, despite the presence of the members of the Executive Board.

The long-running debate on the costs and benefits of Economic and Monetary Union in Europe, EMU (see Feldstein, 1997 and Wyplosz, 1997 for a vivid synthesis) has always taken for granted that EMU is a sure loss from the point of view of monetary policy since participating countries relinquish an instrument of macroeconomic stabilisation useful in the event of asymmetric, country-specific shocks. Only countries with a track record of high inflation could hope to assuage this welfare loss through a gain in credibility. In analogy with the ‘advantage of tying one's hands’ that motivated participation in the European Monetary System (Giavazzi and Pagano, 1988), credibility gains could be reaped by delegating monetary policy to an institution that, according to the Maastricht Treaty, is at least as independent and committed to price stability as the Bundesbank. Yet, the remarkable convergence to low inflation rates that has taken place in Europe1 undermines the relevance of this argument, reasserting the validity of the standard verdict that EMU is a sure loss from the monetary point of view. Benefits have to be searched in other areas: from strategic geo-political interests to the mundane, but more tangible, gains from reduced transaction costs. As the analysis of this paper shows, the conventional line of reasoning neglects an important gain from EMU that can offset the welfare loss due to the poorer stabilisation performance of the single monetary policy and reverse the above verdict, strictly from the point of view of monetary analysis. The decision-making process within the Governing Council of the European Central Bank (ECB)—the collegiate body in charge of the European monetary policy—provides an effective institutional arrangement to generate a credible commitment that can substantially reduce, albeit not eliminate altogether, the inflationary bias that plagues discretionary monetary policy. Thus, all participating countries, even if they are by now endowed with equally credible central banks, stand to gain from EMU in the monetary field. The politico-economic approach to monetary policy in the wake of Kydland and Prescott (1977) and Barro and Gordon (1983) has long established the two factors ultimately lying at the root of the inflationary bias: the policy-makers’ inclination to engineer inflation surprises in the futile attempt to stimulate output above its natural level and the non-availability of a ‘commitment technology’ capable of restraining this inclination while preserving an active stabilisation role for monetary policy. The first-best monetary rule contingent on the realisation of the relevant macroeconomic shocks is not time consistent and, therefore, in the absence of a credible commitment, price and wage setters anticipate a higher inflation rate that prevails in equilibrium without any benefit in terms of average level or variance of output. The appointment of independent central bankers less prone to output stabilisation than the public at large (Rogoff, 1985 and Lohmann, 1992)—possibly complemented with contracts providing appropriate incentives to central bankers (Walsh, 1995 and Svensson, 1997)—is the institutional arrangement to address the issue that has received the broadest support in theory and practice. This type of arrangements improves welfare not by eliminating the time-consistency problem, but rather by shifting it with reference to the personal preferences and incentives of (appropriately selected) central bankers. Monetary policy making in a collegiate body involves a different type of incentive (Blinder and Morgan, 2000, Buiter and Sibert, 2001 and Mihov and Sibert, 2002). Each of the participants in the decision-making process pursues his objectives under the constraints stemming from the strategic interaction not only with the private sector, as in standard analyses, but also vis-à-vis his colleagues in the board. In the case of a monetary union consisting of several countries that retain political and economic sovereignty while relinquishing monetary powers, board members may entertain objectives with reference to the country they represent or come from, notwithstanding the provisions of the Statute of the ECB that assign only Union-wide objectives to monetary policy. If national objectives are contemplated, they are bound to be in conflict when asymmetric shocks hit the Union. Previous theoretical studies have explored the implications of this conflict for the selection of the national appointees to the board (Alesina and Grilli, 1992) or the distribution of power between central and regional interests (von Hagen and Süppel, 1994). De Grauwe et al. (1998) estimate the likely difference between interest rate policies desired on national grounds and come to the conclusion that, under various hypotheses about the decision-making process within the ECB Council, the welfare loss caused by ‘the-one-size fits-all’ monetary policy is presumably small because of the positive correlation observed between national shocks, whereas Hughes Hallett and Weymark (2002) reach the opposite conclusion. The present analysis instead focuses on the repeated nature of the interaction within the ECB Council and shows that, if members are sufficiently patient, the pursuit of national objectives leads to the formation of stable, self-sustaining coalitions in the repeated voting game. The incentive structure supporting the coalitions, and the corresponding sub-game perfect equilibria, is time consistent and thus credible in the eyes of the private sector. Therefore, it provides an effective commitment capable of solving the time-consistency problem of monetary policy. By making available a new commitment technology, EMU improves welfare with respect to national monetary sovereignty for plausible values of the fundamental features of the problem—the number of countries in the Union, the frequency of adverse supply shocks, the relative weight assigned to the stabilisation of output relative to inflation. In addition to showing that the conventional wisdom on the welfare comparison between EMU and national sovereignty is flawed, the analytical framework developed in this paper allows light to be shed on two related issues: the allocation across countries in the Union of the stabilisation benefits associated with the conduct of the single monetary policy and the welfare implications of the presence in the ECB Council of centrally appointed members of the Executive Board in addition to the governors of national central banks of the countries participating in EMU. Following the path breaking approach to collective decision-making proposed by Baron and Ferejohn (1989), this paper shows that the response of the single monetary policy to country-specific shocks is ruled by the emergence of stable coalitions that only consider the stabilisation of the corresponding economies. These equilibria are characterised by both a ‘reciprocity’ feature (in each period, the demand of some coalition members for easy money so as to alleviate their domestic stabilisation problem is approved because benefiting members are expected to reciprocate, and indeed do so, with a similar concession in future periods) and a ‘predatory-majority’ element (the single monetary policy does not take into any account the stabilisation needs of the countries outside the coalition). However, the stabilisation benefits from the single monetary policy can be distributed very unevenly also among members of the ruling coalition themselves, since even poorly treated members may find it preferable to support the coalition rather than to deviate and be punished by exclusion from the majority, thereby losing all stabilisation benefits. This result calls for particular attention in the selection of the rules of procedure of the ECB Council, left undetermined by the Treaty, since they are shown to play a crucial role in the determination of the characteristics of the prevailing equilibrium. Moving to the role of the members of the Executive Board (who are assumed to entertain stabilisation objectives for the Union as a whole rather than for specific countries), the analysis shows that their effectiveness in steering the ECB Council decisions towards Union-wide welfare is contingent on the range of strategies considered in the Council. If either Council members only care about current economic conditions or only consider monetary policy rules with a proportion of supply-shock accommodation constant across countries, a policy of partial accommodation of national shocks in view of their impact on the economic conditions of the Union is most likely to be adopted. The presence of Board members in the ECB Council thus proves successful in redressing the over-representation of small countries’ interests inherent in the one-man-one-vote principle but reduces the welfare gains from the new commitment technology associated with EMU as it implies a larger inflationary bias. When a broader class of monetary policy rules is considered, the role of the members of the Executive Board is substantially weakened and ultimately boils down to enforcing the mere enlargement of the size of the equilibrium coalition. The paper is organised as follows. Section 2 presents the building blocks of the model. Section 3 describes the features and properties of the myopic equilibrium when governors take into account current economic conditions only. Section 4 characterises the equilibria of the repeated voting game for the selection of the single monetary policy, while Section 5 contains the analysis of the division of the stabilisation benefits within the coalition. Section 6 explores the forces determining the composition of coalitions within the ECB Council when the model is extended to allow for differences in economic structures across countries. Section 7 investigates the implications of the presence in the ECB Council of the members of the Executive Board. Section 8 concludes.

If countries are equally averse to inflation, EMU is usually thought to imply a sure welfare loss, at least from the point of view of monetary policy, since countries relinquish a policy instrument with no credibility gain. The analysis of this paper shows that the conventional wisdom may well be wrong. If governors entertain stabilisation objectives for their country of origin, decision making within the ECB Council—the collegiate body in charge of the single monetary policy—provides an incentive structure that allows credible commitments vis-à-vis the private sector. This ‘commitment technology’ reduces the inflationary bias that plagues discretionary monetary policy and, for each country, can offset the welfare loss from the poorer stabilisation performance of the ‘one-size-fits-all’ monetary policy. Following the approach to collective decision making put forward by Baron and Ferejohn (1989), the paper has also investigated the strategic interaction among members of the Council for the allocation of the stabilisation benefits from the conduct of the single monetary policy. It has proved that very unequal distributions across EMU can be supported by self-enforcing majority coalitions, pointing to the importance of the selection of the procedures governing proposal making and voting in the Council, left open by the Maastricht Treaty—an issue particularly relevant in the light of the tension between the provision for unweighted majority voting on monetary policy matters and the marked difference in size of the economies participating in EMU. When sufficiently marked across countries, differences in economic structures play a crucial role in the determination of the composition of the ruling coalition in the Council. For example, if supply shocks are correlated, countries with the strongest positive correlation of shocks tend to congregate in a coalition. In this case too, however, unequal distributions of the stabilisation benefits can prevail in equilibrium, although the viability of the coalition requires that all members receive at least a certain share of the benefits linked to the intensity of structural differences. The analysis also provides new insights about the interaction between governors and the members of the Executive Board in the setting of the single monetary policy. Board members, who are assumed to pursue the welfare of the Union as a whole, can effectively steer the ECB Council decisions in that direction (and hence redress the over-representation of small countries’ interests inherent in the one-man-one-vote principle) only if the menu of monetary policy rules is restricted. The success of the Executive Board, however, comes at the price of reducing the welfare gains stemming from the new commitment technology associated with monetary policy decision-making in EMU, since it implies a larger inflationary bias. When Council members are allowed to bargain over the distribution across countries of stabilisation benefits stemming from the single monetary policy, the role of Board members in the decision-making process is substantially weakened and ultimately boils down to enforcing the mere enlargement of the size of the equilibrium coalition, without necessarily succeeding in preventing very unequal distributions. The definition of Rules of Procedure within the ECB Council that formally assign the initiative of putting forward proposals to Board members stands as the institutional device to support the pursuit of Union-wide goals under the maintained assumptions that Board members are less prone than governors to pay special attention to the economic conditions in any individual country in the Union.