scholarly journals Checks and Balances, Private Information, and the Credibility of Monetary Commitments

2002 ◽  
Vol 56 (4) ◽  
pp. 751-774 ◽  
Author(s):  
Philip Keefer ◽  
David Stasavage
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Political Institutions ◽  
Private Information ◽  
Strong Support ◽  
Central Bank Independence ◽  
Information Asymmetries ◽  
The Public ◽  
Two Factors ◽  
The Impact

In this article, we argue that the effectiveness of central bank independence and exchange-rate pegs in solving credibility problems is contingent on two factors: political institutions and information asymmetries. However, the impact of these two factors differs. We argue that the presence of one institution—multiple political veto players—should be crucial for the effectiveness of central bank independence, but should have no impact on the efficacy of exchange-rate pegs. In contrast, exchange-rate pegs should have a greater anti-inflationary impact when it is difficult for the public to distinguish between inflation generated by policy choice and inflation resulting from exogenous shocks to the economy. Such information asymmetries between the public and the government, however, do not increase the efficacy of central bank independence. Empirical tests using newly developed data on political institutions provide strong support for our hypotheses.

Financial globalization and institutions in Africa: the case of foreign direct investment, central bank independence and political institutions

2020 ◽  
Vol 16 (6) ◽  
pp. 931-953
Author(s):  
Abel Mawuko Agoba ◽  
Elikplimi Agbloyor ◽  
Afua Agyapomaa Gyeke-Dako ◽  
Mac-Clara Acquah
Keyword(s):  
Foreign Direct Investment ◽  
Central Bank ◽  
Political Institutions ◽  
Direct Investment ◽  
Central Bank Independence ◽  
Financial Globalization ◽  
Turnover Rates ◽  
Fdi Inflows ◽  
Central Bank Governor ◽  
The Impact

AbstractIn this paper, we examine the bi-directional relationship between financial globalization (proxied by foreign direct investment (FDI) flows) and economic institutions (proxied by central bank independence (CBI)) taking into consideration the role of political institutions. We test our argument on a sample of 48 African countries (1970–2012) using a two-step System Generalized Methods of Moments, with collapsed instruments and Windmeijer robust standard errors. Using two proxies for CBI, the study finds that while legal CBI does not have a significant impact on FDI, high central bank governor turnover rates have a significantly negative impact on FDI inflows. However, higher levels of political institutions significantly enhance the impact of legal CBI on FDI inflows, and dampen the impact of high central bank governor turnover rates on FDI inflows. The study also shows that, higher FDI inflows have a significantly positive impact on both legal and de facto CBI. This impact is accelerated in countries characterized by higher levels of political institutions.

scholarly journals The Political Economy of Monetary Institutions

2002 ◽  
Vol 56 (4) ◽  
pp. 693-723 ◽  
Author(s):  
William Bernhard ◽  
J. Lawrence Broz ◽  
William Roberts Clark
Keyword(s):  
Exchange Rate ◽  
Central Bank ◽  
Open Economy ◽  
Political Institutions ◽  
Exchange Rate Regime ◽  
Central Bank Independence ◽  
Time Inconsistency ◽  
Party Competition ◽  
Policy Objectives ◽  
Exchange Rate Arrangements

In recent decades, countries have experimented with a variety of monetary institutions, including alternative exchange-rate arrangements and different levels of central bank independence. Political economists have analyzed the choice of these institutions, emphasizing their role in resolving both the time-inconsistency problem and dilemmas created by an open economy. This “first-generation” work, however, suffers from a central limitation: it studies exchange-rate regimes and central bank institutions in isolation from one another without investigating how one monetary institution affects the costs and benefits of the other. By contrast, the contributors to this volume analyze the choice of exchange-rate regime and central bank independence together and, in so doing, present a “second generation” of research on the determinants of monetary institutions. The articles incorporate both economic and political factors in explaining the choice of monetary institutions, investigating how political institutions, democratic processes, political party competition, and interest group pressures affect the balance between economic and distributional policy objectives.

A hybrid approach to exchange rates

2016 ◽  
Vol 33 (1) ◽  
pp. 50-68 ◽  
Author(s):  
Guangfeng Zhang ◽  
Ian Marsh ◽  
Ronald MacDonald
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Real Time ◽  
Private Information ◽  
Hybrid Approach ◽  
Exchange Rate Volatility ◽  
Content Type ◽  
Macro News ◽  
The Impact ◽  
Exchange Rates Volatility

Purpose – This study aims to investigate the impact of information, both public macro news and private information, on exchange rate volatility in an integrated framework. Design/methodology/approach – The authors apply real-time data of macro announcements and high-frequency trading data (German Deutsche Mark to US dollar, DEM/USD, from 1 May to 31August 1996) to GARCH models and examine various model specifications. Findings – Data analysis demonstrates real-time macro news and market makers’ private information both have a significant impact on exchange rate volatility, but there is no interaction between macro and micro information in the information transmission process. Originality/value – This study contributes to empirical hybrid studies of examining exchange rates volatility, which is in line with literature that combine both macro and micro fundamentals in examining exchange rates variation. Particularly, a key element of this study is to use a microstructure fundamental variable, namely, order flow, to capture private information in an exchange rate volatility study.

scholarly journals Appearance of a Robot Affects the Impact of its Behaviour on Perceived Trustworthiness and Empathy

2016 ◽  
Vol 7 (1) ◽  
Author(s):  
Jakub Złotowski ◽  
Hidenobu Sumioka ◽  
Shuichi Nishio ◽  
Dylan F. Glas ◽  
Christoph Bartneck ◽  
...  
Keyword(s):  
Human Interaction ◽  
Interaction Partner ◽  
The Public ◽  
Two Factors ◽  
And Behavior ◽  
The Impact ◽  
Companion Robots ◽  
Negative Behaviour

AbstractAn increasing number of companion robots have started reaching the public in the recent years. These robots vary in their appearance and behavior. Since these two factors can have an impact on lasting human–robot relationships, it is important to understand their effect for companion robots.We have conducted an experiment that evaluated the impact of a robot’s appearance and its behaviour in repeated interactions on its perceived empathy, trustworthiness and anxiety experienced by a human. The results indicate that a highly humanlike robot is perceived as less trustworthy and empathic than a more machinelike robot. Moreover, negative behaviour of a machinelike robot reduces its trustworthiness and perceived empathy stronger than for highly humanlike robot. In addition, we found that a robot which disapproves of what a human says can induce anxiety felt towards its communication capabilities. Our findings suggest that more machinelike robots can be more suitable as companions than highly humanlike robots. Moreover, a robot disagreeing with a human interaction partner should be able to provide feedback on its understanding of the partner’s message in order to reduce her anxiety.

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