Positive Political Economy
Theory and Evidence

The first coherent empirical investigation of positive models of political economy.

Sylvester C. W. Eijffinger (Edited by), Harry P. Huizinga (Edited by)

9780521572156, Cambridge University Press

Hardback, published 9 March 1998

316 pages, 36 tables
23.6 x 15.6 x 2.6 cm, 0.625 kg

This book investigates how observed differences in institutions affect political and economic outcomes in various social, economic, and political systems. It also examines how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies. This volume tackles both monetary and real topics in an integrated way, and represents the first coherent empirical investigation of positive models of political economy. The various contributions discuss issues of great topicality not just for Europe, but for all developed economies: why do central banks matter? What determines their independence? How do central bank independence and exchange rate regimes affect monetary integration and activism? The volume also discusses the costs of a monetary union, unemployment benefits, and redistributive taxation.

Preface
1. Introduction Sylvester Eijffinger and Harry Huizinga
Part I. Monetary Institutions and Policy: 2. Reputational versus institutional solutions to the time-consistency problem in monetary policy Susanne Lohmann
3. Monetary Union and monetary federalism: reciprocity political business cycles Jürgen von Hagen
4. The ultimate determinants of central bank independence Sylvester Eijffinger and Eric Schaling
5. Central bank autonomy and exchange rate regimes - their effects on monetary accommodation and activism Alex Cukierman, Pedro Rodriguez, and Steven Webb
6. Uncertainty, instrument choice, and the uniqueness of Nash equilibrium: microeconomic and macroeconomic examples Dale Henderson and Ning Zhu
7. New empirical evidence on the costs of European Monetary Union Hélène Erkel-Rousse and Jacques Mélitz
Part II. Exchange Rate Policy and Redistribution: 8. Exchange rate anchors and inflation: a political economy approach Sebastian Edwards
9. Why capital controls? Theory and evidence Gian Maria Milesi-Ferretti
10. The political economy of the Exchange Rate Mechanism Patrick Minford
11. Unemployment benefits and redistributive taxation in the presence of labour quality externalities Harry Huizinga
Index.

Subject Areas: Political economy [KCP]