Ruhr Economic Papers

Ruhr Economic Papers #175

European Monetary Policy and the ECB Rotation Model - Voting Power of the Core versus the Periphery

by Ansgar Belke and Barbara von Schnurbein

University of Duisburg-Essen, 03/2010, 42 S./p., 8 Euro, ISBN 978-3-86788-196-8

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Abstract

We analyze the ECB Governing Council’s voting procedures. The literature has by now discussed numerous aspects of the rotation model but does not account for many institutional aspects of the voting procedure of the GC. Using the randomization scheme based on the multilinear extension (MLE) of games, we try to close three of these gaps. First, we integrate specific preferences of national central bank presidents, i.e. their desired interest rates. Second, we address the agenda-setting power of the ECB president. Third, we do not simulate an average of the decisions but look at every relevant point in time separately.

JEL-Classification: D72, D78, E58

Keywords: Euro area; European Central Bank; monetary policy; rotation; voting rights

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