During its short life-time the MPC has made changes in its procedures and remains open to the possibility of further improvements. But unnecessary tinkering would be a distraction from its main purpose. One does not have to go as far as Lord Falkland, who said in 1641 that “If it is not necessary to change something, then it is necessary not to change it”, to believe that, at least for the time being, major changes to the MPC are unnecessary. And if imitation is the sincerest form of flattery, then the Government can draw comfort from Michael Howard’s speech in March of this year when he argued that “Nor, given the importance of stability and continuity, do I think it right to propose any major changes in either the remit or the composition of the Monetary Policy Committee”. The fact that there is a broad, cross-party consensus on the objectives and broad framework of monetary policy is one reason to think that the stability we have experienced in the first five years of the MPC will continue in the future. 5. Conclusions  The idea behind the MPC was to take day-to-day politics out of monetary policy. It is now widely accepted that this was desirable. Macroeconomic policy in Britain had been much too exciting for comfort for most of the post-war period. In the 1970s, inflation averaged over 13% a year, and reached a peak of 27% in August 1975.
In the Bank study, each participant was asked to play a simple, computer based, monetary policy game sixteen times: four rounds as individual policy makers, followed by eight rounds in a committee of five players, and finally a further four rounds as individuals. The committee stages were divided into two parts: four rounds where committee members were not allowed to discuss their decisions although they could observe the unattributed votes of other players - and a further four rounds where discussion was permitted. As a control for learning, the order of the ‘discussion’ and ‘no discussion’ set of games was randomised across the committees. 1  Fry, M, Julius, D, Mahadeva, L, Roger, S and Sterne, G (1999),“Key issues in the choice of monetary policy framework”, in Mahadeva, L and Sterne, G (eds. ), Monetary frameworks in a global context, Routledge  2  Blinder, A S and Morgan, J (2000), “Are two heads better than one: an experimental analysis of group vs individual decision making”, NBER Working Paper, No. 7909, September  3  Lombardelli, C, Proudman, A J and Talbot, J I (2002), “Committees vs individuals: an experimental analysis of monetary policy decision-making”, Bank of England Working Paper (forthcoming)  2  BIS Review 34/2002  Each game consisted of ten periods of play in each of which the individual or committee had to decide what interest rate to set in response to the data for output and inflation generated in the previous period.