The origins of monetary policy disagreement: The role of supply and demand shocks

Paulo Santos Monteiro, Joao Madeira, Carlos Madeira

Research output: Contribution to journalArticlepeer-review


We investigate how dissent in the FOMC is affected by structural macroeconomic shocks obtained using a medium-scale DSGE model. We find that dissent is less (more) frequent when demand (supply) shocks are the predominant source of inflation fluctuations. In addition, supply shocks are found to raise private sector forecasting uncertainty about the path of interest rates. Since supply shocks impose a trade-off between inflation and output stabilization while demand shocks do not, our findings are consistent with heterogeneous preferences over the dual mandate among FOMC members as a driver of policy disagreement.
Original languageEnglish
JournalReview of economics and statistics
Publication statusAccepted/In press - 12 Sept 2023


  • FOMC
  • Committees
  • Monetary policy
  • Structural shocks
  • Dissent

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