Monetary Policy Committees, Voting Behavior and Ideal Points

While not obvious at first sight, in many modern economies, the position of a monetary authority is similar to the position of the highest-level court (Goodhart (2002)). For example, both bodies are expected to operate independently even though there are crosscountry differences in what independence entails. In the United Kingdom, the highest court is the Appellate Committee of the House of Lords (in short: Law Lords). There is a consensus among legal scholars that the powers of Law Lords with respect to the legislature are less wide ranging in the United Kingdom than the United States’ counterpart, the supreme court (Goodhart and Meade (2004), p.11). In economic jargon one says that the Supreme Court has goal independence whereas the Law Lords have instrument independence.