EconPapers    
Economics at your fingertips  
 

Wage Inflation, Electoral Uncertainty and the Exchange Rate Regime: Theory and UK Evidence

George Alogoskoufis (), Ben Lockwood () and Apostolis Philippopoulos ()

No 657, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We extend the `rational-partisan' model of inflation to allow for the effects of unemployment persistence on the dynamics of inflation. We combine this model with the `exchange-rate-regime' model of inflation and examine the experience of the United Kingdom. Outside the fixed exchange rate regime of Bretton Woods, persistently high inflation can be attributed to the failure of political parties to precommit to price stability, in the light of unemployment persistence. Elections are associated with higher inflation, with the exception of the Thatcher period. There is no evidence that the Labour party is more inflationary in general than the Conservatives.

Keywords: Elections; Exchange Rate Regimes; Inflation; Politics; Unemployment; United Kingdom (search for similar items in EconPapers)
JEL-codes: E31 F33 (search for similar items in EconPapers)
Date: 1992-03
References: Add references at CitEc
Citations: View citations in EconPapers (22) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=657 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Wage Inflation, Electoral Uncertainty and the Exchange Rate Regime: Theory and UK Evidence (1992) 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:cpr:ceprdp:657

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=657

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2020-07-06
Handle: RePEc:cpr:ceprdp:657