Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/29892
Authors: 
Belke, Ansgar
Potrafke, Niklas
Year of Publication: 
2009
Series/Report no.: 
Ruhr economic papers 94
Abstract: 
This paper examines the effect of government ideology on monetary policy in a quarterly data set of 15 OECD countries in the period 1980.1-2005.4. Our Taylor-rule specification focuses on the interactions of a new time-variant indicator for central bank independence and government ideology. The results suggest that leftist governments did not decrease short term nominal interest rates at all. In contrast, short term nominal interest rates were higher under leftist governments. A potential reason for this finding might be that leftist governments have sought to make a market-oriented policy shift by delegating monetary policy to conservative central bankers.
Subjects: 
Monetary policy
Taylor rule
government ideology
partisan politics
central bank independence
panel data
JEL: 
E52
E58
D72
C23
ISBN: 
978-3-86788-105-0
Document Type: 
Working Paper

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