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Political Instability, Uncertainty and Economics

  • Fabrizio Carmignani

    (Universit� degli Studi di Milano--Bicocca and Glasgow University)

This paper focuses on the relationship between political instability, policy--making and macroeconomic outcomes. The theoretical section explores various models that explain the effect of instability (and political uncertainty) on growth, budget formation, inflation and monetary policy. The empirical section discusses the evidence on the predictions generated by theoretical models. Preliminary to this discussion, however, is the analysis of a few general issues concerning the specification and estimation of econometric models with political variables. Some new results are then produced on the empirical relevance of theories of strategic use of fiscal deficit. Copyright Blackwell Publishing Ltd. 2003

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Article provided by Wiley Blackwell in its journal Journal of Economic Surveys.

Volume (Year): 17 (2003)
Issue (Month): 1 (February)
Pages: 1-54

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Handle: RePEc:bla:jecsur:v:17:y:2003:i:1:p:1-54
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