Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: The paper looks at the role of heterogeneous preferences on inflation. Based on a model of low inflation as a public good I test empirically the hypotheses that social transfers and partisanship matter for inflation.

Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: Coalition governments are at least as or even more capable of deflating than single party governments. This empirical observation and theoretical prediction contradicts veto actor and public goods theories which stress the collective action problems born in coalition governments causing delayed reforms. I argue that coalition governments were more responsive to the inflationary shocks of the seventies and eighties than single party governments because they resolved their collective action problem with policy trade-offs and mutual concessions. Deflations pose distributive dilemmas which are easier to resolve, in the longer run, in more inclusive political systems. When the parties in coalition put different weights in policies because they have different salient issues, policy consensus is possible through logrolling and policy tradeoffs. The result of this bargaining process is higher price stability along with higher social insurance. I test my argument on 18 OECD countries from 1972 to 1990 and I find that the more proportional the electoral law and thus the more inclusive the political system of a country is, the more social insurance played a crucial role in deflation. Moreover, this deflationary effect is independent of the level of wage bargaining coordination in the economy. On the other hand, in less proportional multiparty governments, central bank independence is also a necessary condition together with increased social transfers for successful deflations. I conclude that power division and power dispersion are both characteristics of coalition governments with distinct macroeconomic effects.

Supporting Publications:
Supporting Document

Publication Type: Conference Paper/Unpublished Manuscript
Abstract: This paper examines the politics of crisis-making as an example of institutional change. The paper develops a model of institutional change based upon the notion of institutions as coordinators of agent?s expectations rather than as instruments of socialization (sociology) or as instruments to realize gains in trade (economics). The point of doing this is to explore the politics of so-called ?critical junctures?, particularly important moments of institutional path departure, as moments of radical uncertainty that agents attempt to characterize and manipulate to alter the path of institutional change in their favor. Thus, rather than crises being self-apparent phenomena that agents uniformly respond to, this paper shows, through the examples of responses to periods of inflation and deflation, how agents represent and construct what a crisis in fact is, is an important part of any understanding of institutional change. Specifically, variation in how common crises are differentially constructed puts the politics back into moments of critical juncture and helps us explain variation across cases.

Publication Type: Conference Paper/Unpublished Manuscript
Review Method: Peer Reviewed
Abstract: Although the negative relationship between central bank
independence and inflation is often taken as common wisdom, there are
still some questions about the relationship in the academic literature.
While accepting the relationship, some question whether independence
will have the same effect on inflation in all countries. Moser and
Keefer and Stasavage both argue that independence will have more of an
effect on inflation when there are checks and balances or multiple veto
players to prevent changes in central bank laws. Others suggest that an
anti-inflation culture has to be established among the populace before
an independent central bank can affect inflation. On the other hand, a
number of studies dispute the claim, arguing that the evidence is time-
or sample-dependent, reflecting the experience of developed countries
only after the end of Bretton Woods, or that it reflects the influence
of an intervening variable such as corporatism or financial sector
opposition to inflation. Forder and Mangano both suggest that the
correlation between measures of central bank independence used to test
the effect on inflation are not that high, leading Forder to conclude
that the relationship between independence and inflation has not been
adequately tested.
Until recently, there has been no way to judge between these claims.
Central bank laws have been slow to change in the past, so scholars
have tested their arguments on the same set of data and countries.
Since the early 1990s, however, a number of countries have reformed
their central banks, giving the banks more independence from the
government. These reforms create a perfect opportunity to test the
different arguments about
the effect of central bank independence by comparing inflation rates in
a country before and after the reform to determine what type of impact
the reform had. In this paper, I will use Box-Jenkins intervention
analysis on a randomly selected set of 10 developed and developing
countries that reformed their central bank during the 1990 to focus on
several questions about the impact of central bank independence on
inflation. First, does central bank independence have an effect on
inflation? Assuming it does have an effect, is the effect stronger when
there are multiple veto players or strong checks and balances? Also,
when is the effect felt-when the reform is announced, after it is put
into place, or after an anti-inflationary culture has been established
in the country? This analysis will help answer some of the pressing
questions about the effect of central bank independence on a country's
macroeconomy. More importantly, it will contribute to our knowledge of
the impact of institutions on the credibility of government
policy.

Publication Type: Conference Paper/Unpublished Manuscript
Abstract: Evolutionary adaptations that limited the expansion of inequality in our context of origin as nomadic foragers have a reverse impact with our exodus from that context. These very same adaptations come to fuel the escalation of inequality in a number of ways. By preconsciously limiting the appeal of repeated status arousers, individuals are sent off in the pursuit of a variety of status distinctions. Initially, the only variety available in sufficient numbers was with packages of moderate distinctions. However, with the post-exodus explosion of status arousers, these preconscious repetition limitations were overwhelmed, and attention could turn to creating bundles of high contrast inequality. Understanding this reverse impact increases the depth of analysis of the social evolution of inequality across our history.