Political Instability, Political Weakness and Inflation: An Empirical Analysis / Sebastian Edwards, Guido Tabellini.

Format:

Book

Author/Creator:

Edwards, Sebastian.

Contributor:

National Bureau of Economic Research.

Tabellini, Guido.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3721.

NBER working paper series no. w3721

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Political Instability, Political Weakness and Inflation

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1991.

Summary:

In this paper we analyze empirically the most important implications of two family political economy models of inflation: the "myopic? government approach and the "weak" government approach. In myopic government models inflation is the deliberate outcome of politicians strategic behavior, while in weak government models inflation is the unavoidable result of a political struggle between different factions. In testing the implications of these two models we use a new data set on political developments in 76 countries for the period 1971-1982. Using a number of alternative definitions of the inflation tax we find out that the data supports the implications of the myopic governments models; countries with a more unstable political environment tend to rely more heavily on the inflation tax. There is no evidence in favor of the weak government hypothesis.

Notes:

Print version record

May 1991.