Macroeconomics and Politics Revisited: Do central banks Matter?

Authors: Lossani, M.¹; Natale, P.²; Tirelli, P.²

Source: Economics and Politics, Volume 12, Number 1, March 2000 , pp. 53-67(15)

Publisher: Blackwell Publishing

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Abstract:

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.

Document Type: Original article

DOI: 10.1111/1468-0343.00068

Affiliations: 1: Università Cattolica, Milano, 2: Università degli Studi di Milano-Bicocca, Piazza dell'Ateneo Nuovo, 1, 20126 Milano, Italy.

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