Premium
Macroeconomics and Politics Revisited: Do central banks Matter?
Author(s) -
Lossani M.,
Natale P.,
Tirelli P.
Publication year - 2000
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/1468-0343.00068
Subject(s) - independence (probability theory) , economics , politics , central bank , monetary policy , macroeconomics , monetary economics , affect (linguistics) , forward guidance , political science , inflation targeting , credit channel , psychology , statistics , mathematics , communication , law
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.