In this paper we will seek to provide a political economy explanation for the government issuance of indexed bonds. We will show that the issuance of nominal bonds decreases inflation whenever the bondholders' constituency is stronger than the taxpayers' constituency. We then assume that public...

Why do dynamic inconsistencies in monetary policy exist? In this paper we present a traditional model with output inefficiencies, but we allow for monetary policy to be influenced by the various constituencies in the economy, that pressure the Congress to in turn pressure the central bank to...

This paper analyzes the existing relation between corruption and economic growth andexamines the possible outcome of a reform implemented by the State to weed out or reducecorruption. It will be stressed that the reform against corruption tends, if not deemed bythe operators to last in time, to...

<i> Sull'irrilevanza dell'indipendenza delle Banche centrali </i> (di Gustavo Piga) - ABSTRACT: In this paper we take another look at the literature on central bank independence. We show that the representative-agent approach to monetary policy is seriously flawed and should not be trusted upon to...

A companion volume to the International Handbook on the Economics of Corruption published in 2006, the specially commissioned papers in Volume Two present some of the best policy-oriented research in the field. They stress the institutional roots of corruption and include new research on topics...

This article provides original evidence on the use of derivatives by sovereign borrowers. Swaps are used both to increase the liquidity of long-term government bonds and for speculation. However, some sovereign borrowers have also used derivatives to "window dress" their public accounts for the...