The gender factor in monetary policy: An event-study design

This article assesses whether central bankers’ monetary policy preferences differ by gender. Based on a monetary policy rule in which the inflation rate is a function of the output gap, we estimated differences in this rule between central banks with female presidents and those with male presidents. Using an original database of 159 countries observed from 1980 to 2018, we adopted an event-study design, which, compared with the related literature, offers a novel approach to evaluate gender differences in inflation changes in the years following a new presidential appointment. A difference-in-differences strategy with propensity score matching showed that men central bank presidents are strongly conservative (hawks) in their monetary policy, at least in the first years after taking office. On the contrary, women central bank presidents are progressive (doves). This implies that women let the inflation rate fluctuate more—in relation to the output gap—than do men. • Progressiveness in monetary policy implies higher responsiveness to the output gap. • Women central bank presidents react more to fluctuations in output than do men. • Women central bankers are more progressive than men central bankers. • In times of economic slowdown, chairwomen allow higher inflation than chairmen. • During economic booms, women central bankers allow lower inflation than men.