The political economy of the impossible trinity

Beckmann, Joscha; Ademmer, Esther; Belke, Ansgar; Schweickert, Rainer

doi:10.1016/j.ejpoleco.2016.10.010

Cited by 16 publications

(9 citation statements)

References 40 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The seminal work in this tradition is Hibbs 1977, which argued and demonstrated that right-wing parties, supported by middle-income groups and businesses, put a higher priority on price stability and try to balance the government budget, while left-wing parties, supported by lower-income groups and ordinary employees, put a higher priority on employment by expanding government expenditure. A wide variety of empirical studies has since highlighted such left-right differences in economic policies and their consequence (e.g., Beckmann et al 2017;Belke and Potrafke 2012;Boix 1998Boix , 2000Bräuninger 2005;Franzese 2002; Garrett 1995Garrett , 1998Hibbs 1977;Korpi andPalme 1998, 2003;Potrafke 2009Potrafke , 2017.…”

Section: Previous Literaturementioning

confidence: 99%

A Study of Political Economy in the Age of Austerity: How Incumbent Partisanship Affects Anti-Government Movements

Suzuki

2021

Preprint

View full text Add to dashboard Cite

In the conventional literature of comparative political economy, fiscal austerity has been considered as a policy pursued typically by governments that adhere to conservative economic ideologies. In recent decades, however, especially after the Eurozone Crisis in 2009, not only right-wing governments but leftist and left-center coalition governments have also carried out austerity policies. While it is generally documented that fiscal austerity spurs citizens' grievances and leads to anti-government movements, whether and how the varying partisanship of the incumbent government affects the pattern of such movements is yet to be known. In this paper, I argue that austerity, when adopted by left-dominant governments, adds a "premium" to public grievances because, as the classic partisan theory posits (Hibbs 1977;Alesina 1987;Garrett and Lange 1989), citizens' prior beliefs about policy consequences are asymmetrical such that they have fewer expectations of austerity when the left-wing parties are in power. Accordingly, I hypothesize that austerity led by the leftist governments results in a higher likelihood of anti-government movements than that led by the right-dominant government. I support this hypothesis by analyzing panel data covering up to 37 developed countries between 1973 and 2015.

show abstract

Section: Previous Literaturementioning

confidence: 99%

A Study of Political Economy in the Age of Austerity: How Incumbent Partisanship Affects Anti-Government Movements

Suzuki

2021

Preprint

View full text Add to dashboard Cite

show abstract

“…Although, there are some studies that have enriched the empirical literature, the objectives pursued by these recent studies are not only aggregated in this study, but this study still further extends the frontier of knowledge in areas not covered. For instance , Beckmann et. al., (2017) appeared to have enriched the empirical literature with the political economy coverage of the impossible trinity; the study was a cross-country study where the peculiarities of the political components of each country have been muddled up.…”

Section: Literature Reviewmentioning

confidence: 99%

Remodelling Macroeconomic Trilemma and Central Bank Behaviour in Nigeria: A Markov-Switching Approach

Ayinde

2020

Preprint

View full text Add to dashboard Cite

This study investigates macroeconomic trilemma and Central Bank behavior in Nigeria. The period of investigation spans the quarterly period of 1981–2017. Upon the data stability condition of Zivot-Andrew unit-root test with structural breaks, the Markov Switching Dynamic Regression was employed as the technique of analysis. With a validated trilemma hypothesis, the study found that the trilemma constraints hold for the Nigerian economy but at the expense of the autonomy of the monetary authority. Being the policy variable of the Central Bank of Nigeria, the exchange rate was found to follow two regimes of fixed and managed-float regimes. The results also showed that political risk was found insensitive to the regimes of exchange rate while the foreign sector was considered as a moderating factor for the behavior of the monetary authority; irrespective of the exchange rate regime.JEL Classifications: F41, E32, E52, C22, E58.

show abstract

“…In this regard, the existing literature identifies political changes, such as those in the party of the presidency or the chair of the central bank, as a major factor affecting monetary policy. Belke and Potrafke (2012) use panel data from the OECD countries to show that government ideology has influenced monetary policy, and Beckmann, Ademmer, Belke, and Schweickert (2017) employ a sample of 111 countries from 1980 to 2010 to show that left‐wing governments prefer exchange rate stability to monetary independence in the case of a negative output gap. Furthermore, Clark and Arel‐Bundock (2013), Jones and Snyder (2014) show evidence of a partisan bias in monetary policy at the Fed.…”

Section: Introductionmentioning

confidence: 99%

Politics and the UK's monetary policy

Chang

Chen

Wang

2020

Scottish J Political Eco

View full text Add to dashboard Cite

This paper examines whether politics causes regime shifts in deviations from the optimal monetary policy in the United Kingdom. After using a dynamic stochastic general equilibrium model to construct the welfare-maximizing policy rule and deviations from the optimal Taylor rule, we show that politics doe indeed play an important role in explaining these deviations. In addition to politics, unemployment rates account for regime shifts in the Taylor rule deviations.

show abstract

The political economy of the impossible trinity

Cited by 16 publications

References 40 publications

A Study of Political Economy in the Age of Austerity: How Incumbent Partisanship Affects Anti-Government Movements

A Study of Political Economy in the Age of Austerity: How Incumbent Partisanship Affects Anti-Government Movements

Remodelling Macroeconomic Trilemma and Central Bank Behaviour in Nigeria: A Markov-Switching Approach

Politics and the UK's monetary policy

Contact Info

Product

Resources

About