{"title":"Do conservative central bankers weaken the chances of conservative politicians?","authors":"","doi":"10.1007/s00355-024-01509-2","DOIUrl":null,"url":null,"abstract":"<h3>Abstract</h3> <p>In this paper, we challenge the claim that a conservative central bank strengthens the likelihood of a conservative government. In contrast, if an election is based on the comparative advantages of the candidates, an inflation-averse central banker can deter the chances of a conservative candidate because once inflation is removed, its comparative advantage in the fight against inflation disappears. We develop a theory based on a policy-mix game with electoral competition, predicting that a tighter monetary policy reduces the chances of a conservative (i.e., inflation-adverse) party while enhancing the chances for a liberal party. To test these predictions, we examine monthly data of British political history between 1987 and 2015, and show that an increase in the interest rate in the 10 months preceding a national election decreases the popularity of a Tory government. Our analysis on a panel of six OECD countries reveals that a pre-election increase of 1 percentage point in the main targeted interest rate rises the popularity of liberal parties by around 3.43 percentage points relative to its trend.</p>","PeriodicalId":47663,"journal":{"name":"Social Choice and Welfare","volume":"65 1","pages":""},"PeriodicalIF":0.5000,"publicationDate":"2024-03-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Social Choice and Welfare","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s00355-024-01509-2","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q4","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
In this paper, we challenge the claim that a conservative central bank strengthens the likelihood of a conservative government. In contrast, if an election is based on the comparative advantages of the candidates, an inflation-averse central banker can deter the chances of a conservative candidate because once inflation is removed, its comparative advantage in the fight against inflation disappears. We develop a theory based on a policy-mix game with electoral competition, predicting that a tighter monetary policy reduces the chances of a conservative (i.e., inflation-adverse) party while enhancing the chances for a liberal party. To test these predictions, we examine monthly data of British political history between 1987 and 2015, and show that an increase in the interest rate in the 10 months preceding a national election decreases the popularity of a Tory government. Our analysis on a panel of six OECD countries reveals that a pre-election increase of 1 percentage point in the main targeted interest rate rises the popularity of liberal parties by around 3.43 percentage points relative to its trend.
期刊介绍：
Social Choice and Welfare explores all aspects, both normative and positive, of welfare economics, collective choice, and strategic interaction. Topics include but are not limited to: preference aggregation, welfare criteria, fairness, justice and equity, rights, inequality and poverty measurement, voting and elections, political games, coalition formation, public goods, mechanism design, networks, matching, optimal taxation, cost-benefit analysis, computational social choice, judgement aggregation, market design, behavioral welfare economics, subjective well-being studies and experimental investigations related to social choice and voting. As such, the journal is inter-disciplinary and cuts across the boundaries of economics, political science, philosophy, and mathematics. Articles on choice and order theory that include results that can be applied to the above topics are also included in the journal. While it emphasizes theory, the journal also publishes empirical work in the subject area reflecting cross-fertilizing between theoretical and empirical research. Readers will find original research articles, surveys, and book reviews.Officially cited as: Soc Choice Welf
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