A country’s form of government has important economic and political consequences, but the determinants that lead societies to choose either parliamentary or presidential systems are largely unexplored. This paper studies this choice by analyzing the factors that make countries switch from...

This paper studies the factors driving changes in judicial independence (JI) as incorporated in constitutions. Two indicators of constitutionally safeguarded JI are constructed. Variations in these indicators are identified based on changes in the constitutions of as many as 100 countries that...

We study changes in the form of government as an example of endogenously determined constitutions. For a sample of 202 countries over the period 1950–2006, we find that most changes are relatively small and roughly equally likely to be either in the direction of more parliamentarian or more...

To analyse the interdependence between monetary and fiscal policy during a financial crisis, we develop an open-economy DSGE model with monetary and fiscal policy as well as financial markets in a continuous-time framework based on stochastic differential equations. Monetary policy is modelled...

We develop a dynamic stochastic full equilibrium New Keynesian model of two open economies based on stochastic differential equations to analyse the interdependence between monetary policy and financial markets in the context of the recent Financial crisis. The effect of bubbles on stock and...

Work on the impact of U.S. monetary policy on emerging financial markets mostly focuses on official federal funds rate announcements; empirical evidence using data on informal communication channels, such as speeches, is scant. Employing a unique data set covering formal and informal...

This paper studies the effects of Federal Reserve communications on US financial market returns from 1998 to 2009 and asks whether a significant change occurred during the financial crisis of August 2007–December 2009. We find, first, that central bank communication moves financial markets in...

In this paper, we study whether central bank communication has a positive effect on market participants’ perception of central banks’ (i) credibility, (ii) unorthodox measures, and (iii) independence. We utilise a survey of more than 550 financial market participants from around the world...