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We empirically characterize episodes of large inflation surges that have been observed worldwide in the last three decades. We document four facts. (1) Inflation following surges tends to be persistent, with the duration of disinflation exceeding that of the initial inflation increase. (2)...
Persistent link: https://www.econbiz.de/10013435117
Expansionary fiscal policies have increased significantly following the subprime crisis in 2007 and the COVID-19 crisis, leading to fiscal dominance concerns, where a growing share of monetary authorities may be forced to deviate from policy targets to accommodate fiscal policies. Meanwhile,...
Persistent link: https://www.econbiz.de/10015056195
Why do some attempts at disinflation lead to substantial reductions in inflation while others do not? We investigate this question in the context of the Federal Reserve's attempts at disinflation since World War II. Our central finding is that a fundamental determinant of success in reducing...
Persistent link: https://www.econbiz.de/10014635629
This paper examines the 2021-2022 global inflation surge and the belated but aggressive monetary policy response to it by advanced economy central banks. Drawing on body of recent empirical research, it identifies three primary drivers of the global inflation surge: supply shocks from pandemic...
Persistent link: https://www.econbiz.de/10015421835
We present a model of the Political Budget Cycle in which voters and politicians have preferences for different types of government spending. Incumbents try to influence voters by changing the composition of government spending, rather than overall spending or revenues. Rational voters may...
Persistent link: https://www.econbiz.de/10012467600
We investigate how criminal organizations strategically use violence to influence elections in order to get captured politicians elected. The model offers novel testable implications about the use of pre-electoral violence under different types of electoral systems and different degrees of...
Persistent link: https://www.econbiz.de/10012456581
We develop a theoretical framework in which political and economic cycles are jointly determined. These cycles are driven by three political economy frictions: policymakers are non-benevolent, they cannot commit to policies, and they have private information about the tightness of the government...
Persistent link: https://www.econbiz.de/10012460305
This paper surveys the recent literature on the theory of macroeconomic policy. We study the effect of various …
Persistent link: https://www.econbiz.de/10012472486
This paper constructs a theoretical model of political business cycles in a Parliamentary system and tests predictions and hypotheses of a theoretical model against the post-war Japanese data. Unlike in a presidential system, the timing of a general election is an endogenous policy variable in a...
Persistent link: https://www.econbiz.de/10012475917
The post-war United States exhibits two rather strong politico-economic regularities. The political regularity is that the party of the President has always lost votes in aid-term Congressional elections, relative to its Congressional vote in the previous elections; the economic regularity is...
Persistent link: https://www.econbiz.de/10012476355