In recent theoretical and empirical research the variation in political and institutional arrangements which may affect the process of national policy formation is examined, in order to explain cross-country differences with respect to fiscal policies pursued. In this paper we build upon this...

We show that within Bertola and Svensson's second-generation target zone model, mean-reverting interventions and endogenous devaluation risk are closely interrelated. Over the period 1983-93 we analyze the degree of mean reversion in the underlying fundamental process as well as the term...

Often it is maintained that democracy is a luxury which comes at a price in terms of subsequent slower increases in national living standards. However, various recent cross-section studies on economic growth have found evidence that lack of civil and political liberties is negatively correlated...

Using a panel of 22 OECD countries over the 1971-96 period, this paper extends previous literature on the effects of fragmented government on fiscal policy outcomes in various directions. First, we focus on data relating to central government as all theories refer to central government. Second,...

This paper reviews research on central banking and monetary policy, with special emphasis on the position of the future European Central Bank. Nowadays, it is often thought that an independent central bank with an explicit mandate to aim for price stability constitutes an important institutional...

This paper analyzes certain periods in the history of the Bundesbank, concentrating on the determinants of central bank independence as suggested in the literature. The authors concluded that some determinants outlined in the literature (like popular backing) played a role in the making of the...

In this note, the authors present the outcomes of two unit root tests, which allow for the existence of a break in real GDP for twelve industrial countries, using data for the period 1870-1989. The authors conclude that in the majority of the countries real per capita GDP has no unit root and...

Using a panel data approach and three different credibility measures, the authors argue that unemployment, inflation, and budget deficits in participating countries have affected the credibility of the exchange rate mechanism of the European Monetary System. In contrast to most previous...

Using various indicators for central bank independence the authors examine the relationship between central bank independence and government budget deficits. Using a two-stage procedure they also analyze whether central bank independence affects the monetization of deficits. First, the...