Political Parties, Elections and Inflation in Greece
AbstractWe extend the `rational partisan model' of inflation and unemployment by introducing inflation and unemployment dynamics. We investigate the case of Greece, which has had a polarized political system and a problem of persistently high inflation in the last two decades. High inflation can be attributed to the failure of political parties to precommit to price stability. The greater aversion of `socialists' to unemployment results in an inflation rate which is higher by five percentage points than under the more anti-inflationary `conservatives'. Unemployment seems to be independent of the identity of the party in power, and post-election years do not seem to be characterized by systematic mistakes on the part of wage setters as predicted by recent partisan theories.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 547.
Date of creation: Jun 1991
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- Berlemann, Michael & Markwardt, Gunther, 2003. "Partisan cycles and pre-electoral uncertainty," Dresden Discussion Paper Series in Economics 01/03, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
- Misala, Józef, 1992. "The experience of the Mediterranean countries with accession to the European Communities: Lessons for Poland," Kiel Working Papers 511, Kiel Institute for the World Economy.
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