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Political Instability, Uncertainty and Economics
Author(s) -
Carmignani Fabrizio
Publication year - 2003
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/1467-6419.00187
Subject(s) - economics , inflation (cosmology) , macroeconomics , political instability , politics , relevance (law) , estimation , macroeconomic model , deficit spending , fiscal policy , econometrics , econometric model , empirical evidence , section (typography) , monetary policy , instability , political science , business , management , epistemology , theoretical physics , advertising , mechanics , law , physics , debt , philosophy
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.