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Macroeconomics and Politics Revisited. Do Central Banks Matter?


  • Marco Lossani
  • Piergiovanna Natale
  • Patrizio Tirelli


This paper provides a model encompassing both partisan influences on monetary policy and the issue of central bank independence. In a regime of partial independence, central bank's policy responses are not immune from partisan influences. Still, the latter fail to affect systematically the expected output level in election years. The predictions of the model are consistent with the empirical literature on partisan cycles and account for some of its controversial findings. Copyright 2000 Blackwell Publishers Ltd..
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  • Marco Lossani & Piergiovanna Natale & Patrizio Tirelli, 1996. "Macroeconomics and Politics Revisited. Do Central Banks Matter?," Working Papers 9612, Business School - Economics, University of Glasgow.
  • Handle: RePEc:gla:glaewp:9612

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    References listed on IDEAS

    1. Doherty, Neil A & Schlesinger, Harris, 1983. "Optimal Insurance in Incomplete Markets," Journal of Political Economy, University of Chicago Press, vol. 91(6), pages 1045-1054, December.
    2. Jonathan Eaton & Gene M. Grossman, 1985. "Tariffs as Insurance: Optimal Commercial Policy When Domestic Markets Are Incomplete," Canadian Journal of Economics, Canadian Economics Association, vol. 18(2), pages 258-272, May.
    3. Grossman, Gene M & Helpman, Elhanan, 1994. "Protection for Sale," American Economic Review, American Economic Association, vol. 84(4), pages 833-850, September.
    4. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," The Quarterly Journal of Economics, Oxford University Press, vol. 101(2), pages 383-406.
    5. Elhanan Helpman, 1995. "Politics and Trade Policy," NBER Working Papers 5309, National Bureau of Economic Research, Inc.
    6. Brakman, Steven & van Marrewijk, Charles, 1995. "Transfers, returns to scale, tied aid and monopolistic competition," Journal of Development Economics, Elsevier, vol. 47(2), pages 333-354, August.
    7. Avinash Dixit, 1989. "Trade and Insurance with Adverse Selection," Review of Economic Studies, Oxford University Press, vol. 56(2), pages 235-247.
    8. Hellwig, Martin, 1987. "Some recent developments in the theory of competition in markets with adverse selection ," European Economic Review, Elsevier, vol. 31(1-2), pages 319-325.
    9. Gerda Dewit, 1996. "Export Insurance Subsidisation and Undistorted Trade Creation," Working Papers 9610, Business School - Economics, University of Glasgow.
    10. Spence, Michael, 1978. "Product differentiation and performance in insurance markets," Journal of Public Economics, Elsevier, vol. 10(3), pages 427-447, December.
    11. Holthausen, Duncan M, 1979. "Hedging and the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 69(5), pages 989-995, December.
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    Cited by:

    1. Franck, Raphaƫl & Krausz, Miriam, 2008. "Why separate monetary policy from banking supervision?," Journal of Comparative Economics, Elsevier, vol. 36(3), pages 388-411, September.
    2. Eric DUBOIS, "undated". "A Simple Politico-Economic Model to Predict Vote and Growth in France," EcoMod2004 330600045, EcoMod.

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