آیا در سیاست های پولی موضوع ایدئولوژی دولت است ؟تجزیه و تحلیل داده های تابلویی برای کشورهای OECD
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|27553||2012||14 صفحه PDF||سفارش دهید||محاسبه نشده|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of International Money and Finance, Volume 31, Issue 5, September 2012, Pages 1126–1139
This paper examines whether government ideology has influenced monetary policy in OECD countries. We use quarterly data in the 1980.1–2005.4 period and exclude EMU countries. Our Taylor-rule specification focuses on the interactions of a new time-variant index of central bank independence with government ideology. The results show that leftist governments have somewhat lower short-term nominal interest rates than rightwing governments when central bank independence is low. In contrast, short-term nominal interest rates are higher under leftist governments when central bank independence is high. The effect is more pronounced when exchange rates are flexible. Our findings are compatible with the view that leftist governments, in an attempt to deflect blame of their traditional constituencies, have pushed market-oriented policies by delegating monetary policy to conservative central bankers.
Many scholars have investigated how government ideology influences monetary policy instruments such as interest rates in OECD countries (e.g., Alesina et al., 1997, Boix, 2000, Clark, 2003 and Sakamoto, 2008). Politicians, however, do not have a direct influence on interest rates, but are subject to institutional restrictions, most notably central bank independence. Ideology-induced politicians can therefore manipulate interest rate policies only when central banks are not independent and subject to directives of the government. Some previous empirical research has dealt with this interaction between central bank independence and government ideology. In contrast to the predictions of the partisan theories, it transpires that leftist governments do not always conduct expansionary monetary policies: when central bank independence was high, interest rates have rather been higher under leftist governments. These previous studies have, however, several shortcomings such as: (1) employing annual data although interest rates are remarkably volatile, (2) choosing ad-hoc econometric frameworks, (3) not considering exchange rate regimes and (4) not considering that government ideology may also influence inflation and the output gap (Berger and Woitek, 2005). This paper deals with these shortcomings to re-examine whether leftist governments have implemented more expansionary monetary policies than rightwing governments. Our empirical strategy is to include government ideology, central bank (in)dependence and their interaction in a Taylor-rule specification. We use a dataset containing quarterly data from 1980.1 to 2005.4 for 23 OECD countries excluding EMU countries, the government ideology index by Potrafke (2009), the new time-variant index on central bank (in)dependence by Arnone et al. (2007) and Klomp and De Haan (2009), and the exchange rate regime data proposed by Reinhart and Rogoff (2008). The results show that leftist governments have somewhat lower short-term nominal interest rates than rightwing governments when central bank independence is low. In contrast, short-term nominal interest rates are higher under leftist governments when central bank independence is high. The effect is more pronounced when exchange rates were flexible. Our findings are compatible with the view that leftist governments, in an attempt to deflect blame of their traditional constituencies, have pushed market-oriented policies by delegating monetary policy to conservative central bankers. The paper is organized as follows. Section 2 discusses theoretical considerations of the influence of government ideology on monetary policy and reviews the empirical literature. Section 3 presents the data and specifies the empirical model. Section 4 reports the regression results and investigates their robustness, and Section 5 discusses the implications of the results.
نتیجه گیری انگلیسی
We have included government ideology, central bank (in)dependence and their interaction in a Taylor-rule specification to re-examine whether leftist governments have implemented expansionary monetary policies than rightwing governments. Our dataset contains quarterly data from 1980.1 to 2005.4 for 23 OECD countries excluding EMU countries. The results show that, as predicted by the partisan theories, short-term nominal interest rates are somewhat lower under leftwing governments than under rightwing governments, but this only applies when central bank dependence is high. Ideology-induced politicians thus appear to implement their preferred policies when central bankers are obliged to follow their directives. This effect is however not robust across different empirical specifications. Short-term nominal interest rates are higher under leftwing governments than under rightwing governments when central banks are independent. This empirical finding has been already derived by Sakamoto (2008). We have re-examined the influence of government ideology and central bank independence on interest rates because the previous studies have shortcomings. We have used quarterly instead of annual data because interest rates are remarkably volatile, and we have controlled for different exchange rate regimes because monetary policy is not effective under a fixed exchange regime. Moreover, we have also considered the interaction of government ideology with inflation and the output gap (Berger and Woitek, 2005). The methodological improvements notwithstanding, we confirm the inferences of the previous research. The result that short-term nominal interest rates are higher under leftwing governments than under rightwing governments when central banks are independent deserves further discussion. In the course of declining electoral cohesion, leftwing OECD-country governments appear to have delegated responsibility for more market-oriented policies to independent central bankers (Sakamoto, 2008 and Bernhard, 2002). In a similar vein, Crowe (2008, p. 749) concludes that: “The motive for delegating the monetary policy decision to a fully (goal-) independent central bank is that it removes the intra-coalition conflict over monetary policy from the political arena”. Leftwing parties themselves might also have an interest in maintaining central bank independence because a central bank that is believed to be neutral is a better ‘scapegoat’ for the stabilization recession that follows expansionary policy experiments (Kane, 1980 and Vaubel, 1997a). We acknowledge that our government ideology index does not consider party changes over time. Hardly any government ideology index that is available for OECD countries explicitly considers party changes over time. Previous research on ideology-induced economic policy-making in OECD countries has also shown that the choice of existing government ideology indices does not influence the inferences (i.e., Pickering and Rockey, 2011). Future research may however deal with government ideology coding which considers party movements such as the shift of the political left in the 1990s. It is also conceivable that politicians and central bankers have different views on the efficacy of policy instruments and they probably care about different economic indicators. Ehrmann and Fratzscher (2011) show, for example, that politicians express a preference for lower interest rates than central bankers. Conservative central bankers may also have counteracted any attempts of expansionary policies under leftist governments. An empirical test of this conjecture requires a measure on political preferences of the central bankers which also remains to be developed in future research. Some studies have used real-time data for inflation and output growth to estimate Taylor rules (i.e., Sturm and De Haan, 2011 and Orphanides, 2001). We have not used real-time data because of lack of data availability for our sample. In a similar vein, we have employed a contemporaneous Taylor-rule specification, while scholars also have employed forward-looking Taylor-rule specifications (i.e., Sauer and Sturm, 2007). Future research on political economic determinants of monetary policy may therefore use forward-looking Taylor-rule specifications and real-time data for inflation and output growth.