IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v51y1986i2p221-239.html
   My bibliography  Save this article

Money and politics in a small open economy

Author

Listed:
  • Stanley Winer

Abstract

A time series analysis indicates monetary growth and the Gallup Poll in Canada are systematically related at ‘electoral cycle’ periodicities (5 to 20 quarters) under flexible exchange rates, and demonstrates the absence of an electoral component in Canadian monetary growth under fixed rates. These results confirm empirically a widely accepted extension of the Mundell-Fleming argument that monetary policy is effective only under flexible rates, which to my knowledge has not before been directly investigated: international constraints on the small open economy under fixed rates lead to the abandonment of monetary policy as an active instrument in electoral politics. Copyright Martinus Nijhoff Publishers 1986

Suggested Citation

  • Stanley Winer, 1986. "Money and politics in a small open economy," Public Choice, Springer, vol. 51(2), pages 221-239, January.
    • Handle: RePEc:kap:pubcho:v:51:y:1986:i:2:p:221-239
    DOI: 10.1007/BF00126000
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF00126000
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF00126000?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jack M. Mintz & Douglas D. Purvis, 1990. "Risk and Economic Policy," Canadian Public Policy, University of Toronto Press, vol. 16(3), pages 298-307, September.
    2. Leroy Laney & Thomas Willett, 1983. "Presidential politics, budget deficits, and monetary policy in the United States; 1960–1976," Public Choice, Springer, vol. 40(1), pages 53-69, January.
    3. Stanley L. Winer, 1979. "Short-Run Monetary-Fiscal Influences in a Federal State: with Application to the Canadian Economy, 1947 to 1973," Public Finance Review, , vol. 7(4), pages 395-424, October.
    4. Martin Prachowny, 1977. "The effectiveness of fiscal and monetary policies under fixed and flexible exchange rates: Some empirical evidence for Canada, 1950–1970," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 113(3), pages 462-486, September.
    5. Jack L. Carr & G. V. Jump & John A. Sawyer, 1976. "The Operation of the Canadian Economy under Fixed and Flexible Exchange Rates: Simulation Results from the TRACE Model," Canadian Journal of Economics, Canadian Economics Association, vol. 9(1), pages 102-120, February.
    6. G. L. Reuber, 1964. "The Objectives of Canadian Monetary Policy, 1949-61: Empirical "Trade-Offs" and the Reaction Function of the Authorities," Journal of Political Economy, University of Chicago Press, vol. 72, pages 109-109.
    7. Frey, Bruno S. & Schneider, Friedrich, 1981. "Central bank behavior : A positive empirical analysis," Journal of Monetary Economics, Elsevier, vol. 7(3), pages 291-315.
    8. Stanley L. Winer, 1986. "The Role of Exchange Rate Flexibility in the International Transmission of Inflation in Long and Shorter Runs: Canada, 1953 to 1981," Canadian Journal of Economics, Canadian Economics Association, vol. 19(1), pages 62-86, February.
    9. Martin Paldam, 1981. "An essay on the rationality of economic policy: The test-case of the electional cycle," Public Choice, Springer, vol. 37(2), pages 287-305, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. J. Ferris & Soo-Bin Park & Stanley Winer, 2008. "Studying the role of political competition in the evolution of government size over long horizons," Public Choice, Springer, vol. 137(1), pages 369-401, October.
    2. J. Stephen Ferris & Stanley L. Winer, 2006. "Politics, political competition and the political budget cycle in Canada, 1870 - 2000: a search across alternative fiscal instruments," Carleton Economic Papers 06-05, Carleton University, Department of Economics.
    3. J Stephen Ferris & Soo-Bin Park & Stanley L. Winer, 2006. "Political Competition and Convergence to Fundamentals: With Application to the Political Business Cycle and the Size of Government," CESifo Working Paper Series 1646, CESifo.
    4. J. Stephen Ferris & Soo-Bin Park & Stanley L. Winer, 2005. "Political Competition and Convergence to Fundamentals: With Application to the Politcal Business Cycle and the Size of the Public Sector," Carleton Economic Papers 05-09, Carleton University, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.
    2. Eric Dubois, 2016. "Political business cycles 40 years after Nordhaus," Public Choice, Springer, vol. 166(1), pages 235-259, January.
    3. Janet Pack, 1988. "The Congress and fiscal policy," Public Choice, Springer, vol. 58(2), pages 101-122, August.
    4. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Post-Print hal-01291401, HAL.
    5. Goodhart, Charles, 1989. "The Conduct of Monetary Policy," Economic Journal, Royal Economic Society, vol. 99(396), pages 293-346, June.
    6. William D. Nordhaus, 1989. "Alternative Approaches to the Political Business Cycle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(2), pages 1-68.
    7. Winer, Stanley L. & Ferris, J. Stephen, 2008. "Searching for Keynesianism," European Journal of Political Economy, Elsevier, vol. 24(2), pages 294-316, June.
    8. Belke, Ansgar, 2000. "Partisan Political Business Cycles in the German Labour Market? Empirical Tests in the Light of the Lucas-Critique," Public Choice, Springer, vol. 104(3-4), pages 225-283, September.
    9. Funashima, Yoshito, 2016. "The Fed-induced political business cycle: Empirical evidence from a time–frequency view," Economic Modelling, Elsevier, vol. 54(C), pages 402-411.
    10. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    11. Benjamin M. Friedman, 2007. "What We Still Don't Know about Monetary and Fiscal Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 38(2), pages 49-74.
    12. David Hakes, 1988. "Monetary policy and presidential elections: A nonpartisan political cycle," Public Choice, Springer, vol. 57(2), pages 175-182, May.
    13. Vaubel, Roland, 1997. "The bureaucratic and partisan behavior of independent central banks: German and international evidence," European Journal of Political Economy, Elsevier, vol. 13(2), pages 201-224, May.
    14. Funashima, Yoshito, 2015. "The Fed-Induced Political Business Cycle," MPRA Paper 63654, University Library of Munich, Germany.
    15. Merkies, A.H.Q.M. & Hofkes, M.W., 1989. "The impact of projecting multidimensional preference functions into operational macroeconometric models," Serie Research Memoranda 0084, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    16. Helge Berger & Marcel Thum, 2000. "News Management in Monetary Policy: When Central Banks Should Talk to the Government," German Economic Review, Verein für Socialpolitik, vol. 1(4), pages 465-493, November.
    17. Ryan Amacher & William Boyes, 1982. "Unemployment rates and political outcomes: An incentive for manufacturing a political business cycle," Public Choice, Springer, vol. 38(2), pages 197-203, January.
    18. J. Stephen Ferris & Marcel-Cristian Voia, 2011. "Does the expectation or realization of a federal election precipitate Canadian output growth?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(1), pages 107-132, February.
    19. Friedrich Schneider & Jörg Naumann, 1982. "Interest groups in democracies — How influential are they?," Public Choice, Springer, vol. 38(3), pages 281-303, January.
    20. J. Stephen Ferris & Soo-Bin Park & Stanley L. Winer, 2005. "Political Competition and Convergence to Fundamentals: With Application to the Politcal Business Cycle and the Size of the Public Sector," Carleton Economic Papers 05-09, Carleton University, Department of Economics.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:51:y:1986:i:2:p:221-239. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.