Essays on the political economy of monetary policy: New empirical approaches and evidence.

摘要

This thesis is composed of three papers, each of which makes a distinct contribution to the study of the political economy of monetary policy. The first paper reassesses our empirical understanding of central bank independence (CBI) and its relationship with economic performance. To overcome flaws in existing indices commonly used to test the economic impact of CBI, I propose a Bayesian item-response approach to the measurement of crossnational CBI levels. After generating a new set of CBI scores I present a simulation extrapolation procedure enabling researchers to properly account for measurement error when using these scores in subsequent regressions. Using these methods to replicate a prominent existing study yields strong empirical evidence for a conditional economic impact of CBI. The second paper examines whether politicians use central bank appointments to induce electoral monetary policy cycles. An item-response model is used to measure the monetary policy preferences of appointees to the Bank of England's Monetary Policy Committee (MPC) based on interest rate voting records. Comparing the preferences of new appointees with their predecessors and studying movements in the median MPC ideal point over time, there has not been a straightforward electoral cycle in MPC appointments. Nevertheless, central bank appointments are important to UK monetary policy, since they have clearly shifted the median MPC ideal point. The third paper conducts a uniquely clean test for partisan central bank appointments by examining the National Bank of Poland (NBP), where we can observe the interest rate voting behaviour of different central bankers directly appointed by different partisan political actors. A novel statistical model of interest rate voting is derived and estimated, yielding monetary policy preference estimates for each appointee. In line with a partisan appointments hypothesis, parties with a more right-wing economic ideology tend to appoint central bankers with more restrictive monetary policy preferences.