When virtue is its own reward: the July RBA MPB minutes
Plus, the August TACO value pack
Michele Bullock speaks to the Anika Foundation lunch in Sydney this week. Photo credit: Stephen Kirchner.
The minutes of the RBA's July Monetary Policy Board meeting shed a bit more light on its decision to leave the official cash rate unchanged in a six-three decision, with the minority supporting a lower cash rate. Presumably, the dissenters wanted the cash rate lowered by 25 basis points instead. But strictly speaking, we don't know that from the minutes. While it is good to know the breadth of support for the current or proposed stance of monetary policy, it would also be useful to know something about its depth. If one MPB member were pounding the table for a 100 basis points easing, should we expect to see that reflected in the minutes?
We know from rational choice theory that the order of voting on a committee can matter to the outcome. The minutes seem to suggest the MPB was given two options by the chair and voted accordingly, but there may be situations in which the Board has to weigh and vote on a more complex set of alternatives. The order of deliberation and voting should be legible from the minutes.
References to variants of 'uncertainty' declined from the May meeting's record high count, which no doubt played into the steady outcome for the cash rate (thanks to Matt Cowgill's R package).
