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Political instability and inflation volatility

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  • Ari Aisen
  • Francisco Veiga

Abstract

The purpose of this paper is to empirically determine the causes of worldwide diversity of inflation volatility. We show that higher degrees of political instability, ideological polarization, and political fragmentation are associated with higher inflation volatility.
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Suggested Citation

  • Ari Aisen & Francisco Veiga, 2008. "Political instability and inflation volatility," Public Choice, Springer, vol. 135(3), pages 207-223, June.
    • Handle: RePEc:kap:pubcho:v:135:y:2008:i:3:p:207-223
    DOI: 10.1007/s11127-007-9254-x
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    More about this item

    Keywords

    Inflation; Volatility; Political instability; Institutions; E31; E63;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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