Dovish Economic Policy Explained

Cite this article as:"Dovish Economic Policy Explained," in The Business Professor, updated November 24, 2018, last accessed October 27, 2020,


Dovish (Fiscal Economy) Explained

A Dove is an economic policy adviser who advocates for low-interest rates believing that they increase employment and encourages economic growth. They believe a low-interest rate increases the demand for consumer borrowing and results in increased consumer spending. They are of the opinion that the negative effects of low-interest rates or inflation are relatively negligible. The statements issued by them suggesting the above is called dovish.

A Little More on Dover or Dovish Views

Dove is the opposite of hawk (or hawkish). In economics, a hawk is the one who advocates for higher interest rates for curbing inflation.
The doves try to protect the consumers and increase the employment rate by lowering the interest rate. In the United States, the Federal Reserve members who promote low-interest rate are the doves and their statements are dovish. Journalists and politicians who advocate for the low-interest rate are also considered as the doves. Economists can also be dovish in nature.

When the interest rate is low the consumers tend to take out car loans, mortgages and credit cards and spend more. This creates a job as the demand increases. This affects the economy positively. But a low-interest rate for long may result in inflation. As the demands increases eventually the price of the commodities shoots up as well. The workers also earn more as the employment rate rises, that increases their buying capacity and they start buying the commodities at a high price. That leads to the cycle of the price increase and wage increase and that ultimately results in inflation.

Reference for Dovish Economic Policy

Academic Research on Dovish Economic Policy

  • ‚󏬆¬†¬†¬†¬† The Politics of Risking Peace: Do¬†Hawks¬†or Doves Deliver the Olive Branch?, Schultz, K. A. (2005). International Organization,¬†59(1), 1-38. This article examines the politics of risking international cooperation with a distrusted adversary using the hawk and dove model. The objective is to show the different impact that a hawk and a dove have on a society with low trust and continued conflicts against its political parties. To achieve this, we take into study two imaginary states, with one having a hawkish government, and the other, a dovish government.
  • ‚󏬆¬†¬†¬†¬† Why¬†hawks¬†fly higher than doves: Intragroup conflict in representative negotiation, Aaldering, H., & De Dreu, C. K. (2012). Group processes & Intergroup relations,¬†15(6), 713-724. This article examines the impact that the status of a minority (either the hawk or dove) has on the results of group representatives in resolving intergroup conflicts. It also shows the influence of the majority sect in representative negotiations and agreements.
  • ‚󏬆¬†¬†¬†¬† Hawks¬†and doves: Values and policy, Gray, C. S. (1975). JPMS: Journal of Political and Military Sociology,¬†3(1), 85. This article explores alternative explanations of the substantive policy differences that divide strategies. It aims to show that early recruitment to the ranks of the hawkish or dovish tendencies in strategic studies is more prompted by professional social relations than the other explanations of substantive policy that divides strategies.
  • ‚󏬆¬†¬†¬†¬† Doves,¬†hawks, and US public opinion, Russett, B. (1990).¬†Political Science Quarterly,¬†105(4), 515-538. The objective of this research is to show the reasons why hawkish leaders have an edge over their dovish counterparts when it comes to conflict resolution with foreign enemies.
  • ‚󏬆¬†¬†¬†¬† Hawks¬†and Doves at the FOMC, Eijffinger, S., Mahieu, R., & Raes, L. (2015). This article examines the viewpoint of Bank Presidents and Board Governors at the FOMC. Indepth research shows that both parties have different viewpoints towards the way things are run. However, from our analysis, it is seen that these differences does not limit the working capability of both parties.
  • ‚󏬆¬†¬†¬†¬† Equilibrium selection with coupled populations in¬†hawk‚Äďdove games: Theory and experiment in continuous time, Benndorf, V., Martinez-Martinez, I., & Normann, H. T. (2016). Journal of Economic Theory,¬†165, 472-486. This research analyses a theory with relations to hawk and dove games (intra and intergroup interactions).
  • ‚󏬆¬†¬†¬†¬† From doves to hawks: A spatial analysis of voting in the¬†Monetary Policy¬†Committee of the Bank of England,, Hix, S., H√łyland, B., & Vivyan, N. (2010). European Journal of Political Research,¬†49(6), 731-758. This article examines the making of monetary policy in the United Kingdom between 1997 and 2008 by analysing voting behaviour in the Bank of England’s Monetary Policy Committee (MPC). This research aims to show the importance of central bank appointments for monetary policy.
  • ‚󏬆¬†¬†¬†¬† Inferring¬†hawks¬†and doves from voting records, Eijffinger, S., Mahieu, R., & Raes, L. (2018). European Journal of Political Economy,¬†51, 107-120. This article examines the various policy preferences of different groups of the Monetary Policy Committee of the Bank of England.
  • ‚󏬆¬†¬†¬†¬† Inferring¬†hawks¬†and doves from voting records, Eijffinger, S. C., Mahieu, R., & Raes, L. (2013). This article examines the various policy preferences of different groups of the Monetary Policy Committee of the Bank of England. Results show that the backgrounds of different members of the committee have a say in their preferences.
  • ‚󏬆¬†¬†¬†¬† Doves for the rich, hawks for the poor? Distributional consequences of¬†monetary policy, Gornemann, N., Kuester, K., & Nakajima, M. (2016). This article examines the impact of monetary policy on household heterogeneity.
  • ‚󏬆¬†¬†¬†¬† 6 Making sense of hawkish and¬†dovish¬†monetary policy in an inflation-targeting environment: Lessons from Canada, Lombardi, D., Siklos, P. L., & Amand, S. S. (2018). Hawks and Doves: Deeds and Words, 63. ¬†This paper studies the effect of the hawk and dove monetary policy in an inflation-targeting area. To achieve different conclusions, emphasis is placed on Canada as a case study.

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