 The effects of elections on macroprudential policyCan Sever and Emekcan Yücel Journal of Comparative Economics, 2022, vol. 50, issue 2, 507-533 Abstract: We provide evidence for a specific challenge in the design of macroprudential policy, namely political interference. Using panel data from 80 countries over the period of 1990–2016, we uncover the electoral cycles in macroprudential policy. We show that a loosening in macroprudential policy becomes more likely in the pre-election year, especially in countries with lower institutional quality. There is no evidence for the reversal of such actions in the post-election year. We also find that capital account openness, the history of macroprudential policy actions and inflation matter in determining the strength of electoral cycles in macroprudential policy, in addition to institutional quality. The electoral cycles are found to be stronger in countries that are financially less open, that relied less on macroprudential policy in the past, and that have lower inflation. Keywords: Macroprudential policy; Elections; Electoral cycles; Political economy; Institutional quality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:50:y:2022:i:2:p:507-533 DOI: 10.1016/j.jce.2021.12.001 Access Statistics for this article Journal of Comparative Economics is currently edited by D. Berkowitz and G. Roland More articles in Journal of Comparative Economics from Elsevier |
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