Populism and Monetary Policy; Evidence from ARDL Framework between 1992-2019

This study examines the effect of populist parties and leaders on monetary policy with data set of 25 countries in the period between 1992 to 2019. Unlike earlier studies, we use populism as an explanatory variable. Based on Taylor-rule specification, we focus on the interactions of a new time-variant index of central bank independence and populist governments. We follow Belke and Potrafke (2012), Cahan et al. (2019), and Giesenow and De Haan's (2019) interest rate panel data analysis. Our findings suggest that populism affects the short-term nominal interest rates when central bank dependence is high