This paper presents a theoretical model of rational retrospective voting, which is tested empirically on pooled cross-sectional and panel data from the Swedish Election Studies between 1985 and 1994 supplemented with time series on inflation and unemployment. Compared with the cross-sectional...

Hoe does central bank conservatism affect labor market reform? In this paper we examine the economic forces at work. An increase in conservation triggers two opposite effects. It reduces the inflation bias of discretionary monetary policy and hence the benefits of a reform. It also increases...