Political monetary cycles: an empirical study

Mercredi | 2019-10-10
Salle B103 – 12h00


The literature dealing with the political impact on monetary authority is marked by an ongoing discussion. This paper aims to prove that politically induced cycles in the monetary policy called political monetary cycles (PMC) exist in reality. We find evidence that such a phenomenon is observable in both developed and developing countries. Moreover, this result is confirmed regardless the level of independence of the central bank. In addition, we examine if the amplitude of these PMC depends on country-specific characteristics such as institutional and monetary policy framework or colonial past. We conclude that PMC are more likely to appear in developing countries characterized by a less important institutional quality, a young central bank or a low oil rent.