Monetary policy, delegation and polarization
Research output: Contribution to journal › Journal article › Research › peer-review
Standard
Monetary policy, delegation and polarization. / Schultz, Christian.
In: Economic Journal, Vol. 109, No. 455, 1999, p. 164-178.Research output: Contribution to journal › Journal article › Research › peer-review
Harvard
APA
Vancouver
Author
Bibtex
}
RIS
TY - JOUR
T1 - Monetary policy, delegation and polarization
AU - Schultz, Christian
N1 - JEL Classification: D72, E32, E58
PY - 1999
Y1 - 1999
N2 - This paper studies the relation between political polarisation and delegation of stabilisation policy. There is asymmetric information about how the economy works: unlike voters, two political parties know the variance of an employment shock. Prior to an election each party proposes a central banker to be chosen if the party wins. If political polarisation is small, voters will learn the true variance and the central banker and the stabilisation policy are the ones most preferred by the median voter. If the political polarisation is high, stabilisation policy does not reflect the variance but only the preferences of the winning party
AB - This paper studies the relation between political polarisation and delegation of stabilisation policy. There is asymmetric information about how the economy works: unlike voters, two political parties know the variance of an employment shock. Prior to an election each party proposes a central banker to be chosen if the party wins. If political polarisation is small, voters will learn the true variance and the central banker and the stabilisation policy are the ones most preferred by the median voter. If the political polarisation is high, stabilisation policy does not reflect the variance but only the preferences of the winning party
U2 - 10.1111/1468-0297.00425
DO - 10.1111/1468-0297.00425
M3 - Journal article
VL - 109
SP - 164
EP - 178
JO - The Economic Journal
JF - The Economic Journal
SN - 0013-0133
IS - 455
ER -
ID: 152481