Polls and Pounds: Public Opinion and Exchange Rate Behavior in Britain

William Bernhard and David Leblang

Quarterly Journal of Political Science, 2006, vol. 1, issue 1, 25-47

Abstract: This article examines the relationship between government popularity and exchange rate movements in Britain since 1987. It argues that: (1) unexpected drops in the government's public support lead to currency depreciations and increased exchange rate volatility, and (2) unanticipated depreciations hurt the government's public support. It estimates separate models of the exchange rate and government voting intention iteratively and recursively. At each iteration, measures of exchange rate and public opinion shocks are generated. These generated variables are employed in the next iteration of estimates, including measures of political shocks in the model of exchange rate behavior and measures of exchange rate movements in the model of voting intention. This enables, therefore, the measurement of both the political costs of currency depreciation and the exchange rate consequences of political competition.

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://dx.doi.org/10.1561/100.00000004 (application/xml)

Related works:
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:now:jlqjps:100.00000004

Access Statistics for this article

More articles in Quarterly Journal of Political Science from now publishers
Bibliographic data for series maintained by Lucy Wiseman ().