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Political Influences on Monetary Policy 1914–84
Author(s) -
ELLIOTT EUEL,
WHITELEY PAUL
Publication year - 1990
Publication title -
governance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.46
H-Index - 76
eISSN - 1468-0491
pISSN - 0952-1895
DOI - 10.1111/j.1468-0491.1990.tb00128.x
Subject(s) - politics , monetary policy , economics , democracy , control (management) , monetary economics , function (biology) , white (mutation) , administration (probate law) , macroeconomics , political science , law , biochemistry , chemistry , management , evolutionary biology , gene , biology
This study examines political, institutional and economic influences on monetary policy in the long run. A monetary policy reaction function is estimated, which focuses principally on the influence of the administration, Congress and the Federal Reserve on outcomes; these influences are estimated together with a variety of economic and political controls. The findings show that partisan control of the White House is particularly important in explaining variations in the growth of the quantity of money over time. Republican control of the White House is associated with tighter money, and Democratic control with looser money, but there are exceptions. Finally, the indirect influence of partisanship on the economic variables in the reaction function suggest that the total effects are stronger than the direct effects alone.