Committees vs Markets

A new paper from the IMF investigates the optimal structure for monetary policy committees, which are described as a "major evolution" over decision making by individual policy makers. The researcher then reviews the literature on how preferences and beliefs are aggregated in committee structures. Our immediate reaction was to jump to a radical but seemingly obvious conclusion — if committees are preferred to individuals thanks to their aggregating functions, then it only follows that deep markets of diverse and heterogenous agents should provide even more effective information pooling, collective accuracy, and dispersed social influence. Said markets already exist and could be invaluable guides to monetary policymakers. A framework for such a design is outlined by Manuel Johnson and Robert Keleher in their book Monetary Policy, A Market Price Approach (1996). Evolution, anyone?