Herrendorf, Berthold; Neumann, Manfred J. M. - University of Bonn, Germany - 1997
takes the government's reelection prospects into account and creates a political cycle in inflation. Our theory is … independent nor a government-dependent central banker is found to produce a systematic inflation bias, albeit equilibrium … consistent with the main stylized facts that a higher degreee of central bank independence decreases average inflation and …