Please use this identifier to cite or link to this item: http://hdl.handle.net/1822/2075

TitleDoes political instability lead to higher inflation? A panel data analysis
Author(s)Veiga, Francisco José
Aisen, Ari
KeywordsInflation
Volatility
Political instability
Institutions
Issue dateApr-2005
CitationANNUAL MEETING OF THE EUROPEAN PUBLIC CHOICE SOCIETY, New Orleans, 2005.
Abstract(s)Economists generally accept the proposition that high inflation rates generate inefficiencies that reduce society’s welfare and economic growth. However, determining the causes of the worldwide diversity of inflationary experiences is an important challenge not yet satisfactorily confronted by the profession. Based on a dataset covering around 100 countries for the period 1960-1999 and using modern panel data econometric techniques to control for endogeneity, this paper shows that a higher degree of political instability is associated with higher inflation. The paper also draws relevant policy implications for the optimal design of inflation stabilization programs and of the institutions favorable to price stability.
TypeConference paper
URIhttp://hdl.handle.net/1822/2075
Peer-Reviewedyes
AccessOpen access
Appears in Collections:NIPE - Comunicações a Conferências

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