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Verhindert die Unabhängigkeit der Zentralbank politische Konjunkturzyklen?

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  • Solveen, Ralph
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    Abstract

    Two theoretical modeis are developed. One describes the behavior of monetary policy before elections, in case of policy instruments being controlled by the government. The other one discusses the effects of a change in the ruling party, if parties differ in the weight they attribute to Inflation in their loss function. Next, the propositions of the modeis are tested for the industrial countries. Furthermore, it is tested whether the independence of the central bank prevents such politicaüy motivated cycles in monetary policy. Simple empirical methods and estimated reaction functions of the G7-countries are applied in this investigation. The empirical evidence is mixed. There is some evidence of opportunistic cycles in monetary policy. But the evidence of positive effects of the independence of the central bank is rather weak. Scarcely any evidence is found of partizan cycles in monetary policy.

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    Bibliographic Info

    Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 747.

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    Date of creation: 1996
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    Handle: RePEc:kie:kieliw:747

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    1. Kremers, Jeroen J M & Ericsson, Neil R & Dolado, Juan J, 1992. "The Power of Cointegration Tests," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 325-48, August.
    2. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
    3. Kydland, Finn E & Prescott, Edward C, 1977. "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 473-91, June.
    4. Breusch, T S, 1978. "Testing for Autocorrelation in Dynamic Linear Models," Australian Economic Papers, Wiley Blackwell, vol. 17(31), pages 334-55, December.
    5. Nordhaus, William D, 1975. "The Political Business Cycle," Review of Economic Studies, Wiley Blackwell, vol. 42(2), pages 169-90, April.
    6. Allen, Stuart D, 1986. "The Federal Reserve and the Electoral Cycle: A Note," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(1), pages 88-94, February.
    7. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
    8. Rogoff, Kenneth, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, MIT Press, vol. 100(4), pages 1169-89, November.
    9. Gilbert, Christopher L, 1986. "Professor Hendry's Econometric Methodology," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 48(3), pages 283-307, August.
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