EconPapers    
Economics at your fingertips  
 

Do Conservative Central Bankers Weaken the Chances of Conservative Politicians?

Maxime Menuet, Hugo Oriola () and Patrick Villieu
Additional contact information
Hugo Oriola: LEO - Laboratoire d'Économie d'Orleans - UO - Université d'Orléans - UT - Université de Tours

Working Papers from HAL

Abstract: In this paper, we challenge the claim that an independent conservative central bank strengthens the likelihood of a conservative government. In contrast, if an election is based on the comparative advantages of the candidates, an inflation-averse central banker can deter the chances of a conservative candidate because once inflation is removed, its comparative advantage in the fight against inflation disappears. We develop a theory based on a policy-mix game with electoral competition, predicting that the chances of a conservative (i.e., inflation-averse) party is reduced in the presence of tighter monetary policy. To test this prediction, we examine monthly data of British political history between 1960 and 2015. We show that a 1 percentage point increase in the interest rate in the 10 months prior to a national election decreases the popularity of a Tory government by approximately 0.75 percentage points relative to its trend.

Keywords: monetary policy; elections; United Kingdom; comparative advantage (search for similar items in EconPapers)
Date: 2021-12-14
New Economics Papers: this item is included in nep-cba, nep-cdm, nep-his, nep-mac, nep-mon and nep-pol
Note: View the original document on HAL open archive server: https://hal.science/hal-03479411
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hal.science/hal-03479411/document (application/pdf)

Related works:
Journal Article: Do conservative central bankers weaken the chances of conservative politicians? (2024) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-03479411

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().

 
Page updated 2025-03-19
Handle: RePEc:hal:wpaper:hal-03479411