In a recent paper in this journal [Demertzis, M., Hughes Hallett, A., Viegi, N., 2004. An independent Central Bank faced with elected governments: European Journal of Political Economy 20, 907-922.] we showed that, when voting is endogenised, an independent and conservative Central Bank will create the tendency for elected governments to become more liberal or populist. That causes policies as well as preferences to diverge. But we did not show whether the Central Bank would then become more conservative in response, by way of disciplining the fiscal authority and protecting its own preferred targets. Building on these earlier results, we examine that question in this paper. I find that the Central Bank would, in its own interest, not retaliate in this fashion except where the government's target for output growth becomes very ambitious. This behaviour seems to match what little empirical evidence we have on Central Bank reactions.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 24 (2008) Issue (Month): 1 (March) Pages: 239-248 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
For technical questions regarding this item, or to correct its listing, contact: (Heidi Boesdal).
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)
Did you know? All full texts are decentralized with the publishers, none reside on this server, thus making it possible to offer this service for free to all parties.