Author:
Clark William Roberts,Reichert Usha Nair,Lomas Sandra Lynn,Parker Kevin L.
Abstract
The effect of increased capital mobility on the national control of macroeconomic policy continues to be a topic of debate. Empirical contributions to this debate share the assumption that domestic macroeconomic policy is driven by either partisan or countercyclical motivations, and that the effects of international financial flows have roughly similar effects in all countries. This article reevaluates the integration hypothesis in a framework in which manipulations of the macroeconomy derive from opportunistic motivations. The article emphasizes the ways in which prior institutional choices effect the way these motivations are translated into actions. Evidence from individual country and pooled time-series tests suggests that opportunistic cycles are less likely to occur when (1) a government maintains a fixed exchange rate in the presence of highly mobile capital or (2) when the central bank enjoys above-average independence.
Publisher
Cambridge University Press (CUP)
Subject
Law,Organizational Behavior and Human Resource Management,Political Science and International Relations,Sociology and Political Science
Cited by
79 articles.
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