Exchange-Rate Regimes, Political Parties and the Inflation-Unemployment Tradeoff: Evidence from Greece
AbstractWe use Greek data during 1960â€“1994 to test and estimate a model in which wage inflation, price inflation and unemployment depend on the exchange rate regime, the identity of the political party in power and whether an election is expected to take place. We respect the Lucas critique and take into account the statistical properties of the data. The main results are: (i) The exchange rate regime matters for inflation. After the fall of the Bretton Woods regime in 1972, there is a Barro-Gordon type inflation bias due to the inability of all policymakers to precommit to low inflation. (ii) There are no Barro-Gordon type partisan differences in inflation or unemployment. Copyright Kluwer Academic Publishers 1998
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Bibliographic InfoArticle provided by Springer in its journal Open Economies Review.
Volume (Year): 9 (1998)
Issue (Month): 1 (January)
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Web page: http://www.springerlink.com/link.asp?id=100323
exchange rates; inflation; political business cycles; unit roots;
Other versions of this item:
- Lee, D.H. & Philippopoulos, A., 1997. "Exchange Rate regimes, Political Parties, and the Inflation-Unemployment Tradeoff: Evidence From Greece," Athens University of Economics and Business 97-05, Athens University of Economics and Business, Department of International and European Economic Studies.
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
- E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
- F30 - International Economics - - International Finance - - - General
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