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Author Belke, Ansgar ♦ Potrafke, Niklas
Source EconStor
Content type Text
Publisher Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)
File Format PDF
Language English
Subject Domain (in DDC) Social sciences ♦ Economics
Subject Keyword Monetary policy ♦ Taylor rule ♦ government ideology ♦ partisan politics ♦ central bank independence ♦ panel data ♦ Geldpolitik ♦ Taylor-Regel ♦ Zentralbankautonomie ♦ Ideologie ♦ OECD-Staaten ♦ Monetary Policy ♦ Central Banks and Their Policies ♦ Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior ♦ Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
Abstract This paper examines the effect of government ideology on monetary policy in a quarterly data set of 15 OECD countries in the period 1980.1-2005.4. Our Taylor-rule specification focuses on the interactions of a new time-variant indicator for central bank independence and government ideology. The results suggest that leftist governments did not decrease short term nominal interest rates at all. In contrast, short term nominal interest rates were higher under leftist governments. A potential reason for this finding might be that leftist governments have sought to make a market-oriented policy shift by delegating monetary policy to conservative central bankers.
ISBN 9783867881050
Part of series Ruhr Economic Papers x94
Learning Resource Type Article
Publisher Date 2009-01-01
Publisher Place Essen
Rights Holder