|
EconStor >
Verein für Socialpolitik >
Ausschuss für Entwicklungsländer, Verein für Socialpolitik >
Proceedings of the German Development Economics Conference, 2008 (Zürich) >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/39914
|
| | |
| Title: | | Inflation and Democracy in Former Extractive Colonies Analysis with a New Instrumental Variable  |
| Authors: | | Mijiyawa, Abdoul |
| Issue Date: | | 2008 |
| Series/Report no.: | | Proceedings of the German Development Economics Conference, Zürich 2008 28 |
| Abstract: | | This paper analyzes the link between inflation and democracy in developing countries. In order to address the endogeneity issue of democracy, I use the date of political independence as an instrument for democratic institutions. The application of the criterion of Stock and Yogo (2002, 2005) for weak instrumental variable in my sample reveals that, the independence date is a good instrument for democratic institutions. Using five years pooled data covering the period 1960-2003, and a sample of 62 developing countries former extractive colonies (including 32 African countries); I find a robust positive causal relationship between inflation and democracy. It appears that democracy increases inflation because democracy stimulates money creation and compromises trade liberalization in my sample of developing countries. Case studies based on Chile, Ghana, and Sri Lanka better illustrate the result relating to the relationship between inflation and democracy in my sample. |
| Subjects: | | Democracy Inflation Median voter Stabilization Policies Weak Instruments Test |
| JEL: | | D78 E31 E63 O17 |
| Document Type: | | Conference Paper |
| Appears in Collections: | | Proceedings of the German Development Economics Conference, 2008 (Zürich)
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/39914
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|