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http://hdl.handle.net/10419/57260
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| Title: | | Can the exchange rate regime influence corruption?  |
| Authors: | | Popkova, Katherina |
| Issue Date: | | 2011 |
| Series/Report no.: | | Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen, Fakultät III: Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht 148-11 |
| Abstract: | | This paper analyses the influence of the exchange rate regime of a country on the level of tolerated corruption with a special focus on the interdependency of monetary and fiscal policies. Using a simple theoretical framework based on Barro-Gordon-Model I compare independent monetary policy with a tight peg arrangement in order to find out which regime is more likely to induce governments to intensify the fight against corruption. It is shown that if corruption has a considerable positive impact on output, a tight peg regime can increase tolerated corruption. However, if corruption has a negative effect on output, a pegged exchange rate regime will lead to a lower level of tolerated corruption. The issue of particular interest appears to be the finding that a strong positive impact of corruption on output can induce governments to choose a pegging regime while a weak positive impact of corruption (and a negative influence of corruption even more) provides an incentive to keep monetary independence. |
| Subjects: | | Exchange Rate Regime Monetary Policy Fiscal Policy Corruption |
| JEL: | | E52 E58 E61 E63 F33 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Volkswirtschaftliche Diskussionsbeiträge, Universität Siegen
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