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When does it take a Nixon to go to China?

Author

Listed:
  • Cukierman, Alex
  • Tommasi, Mariano

Abstract

Substantial changes in policy are sometimes implemented by "unlikely" parties; for example, radical market-oriented reforms by populist parties and substantial steps towards peace by "hawks" like Begin or Nixon. To account for such episodes, we develop a framework in which incumbent politicians have more information than the voting public about the state of the world, and hence about which policies are optimal. Politicians are unable to transmit fully this information, since there is also incomplete information about their preferences. We conclude that popular support for a policy, or its "credibility," depends on the policymakerpolicy pair.

Suggested Citation

  • Cukierman, Alex & Tommasi, Mariano, 1997. "When does it take a Nixon to go to China?," Foerder Institute for Economic Research Working Papers 275627, Tel-Aviv University > Foerder Institute for Economic Research.
  • Handle: RePEc:ags:isfiwp:275627
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    File URL: http://ageconsearch.umn.edu/record/275627/files/TEL-AVIV-FSWP-264.pdf
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    References listed on IDEAS

    as
    1. Alex Cukierman, 1992. "Central Bank Strategy, Credibility, and Independence: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031981, January.
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    More about this item

    Keywords

    Financial Economics; International Relations/Trade; Political Economy;

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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