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Please use this identifier to cite or link to this item: http://hdl.handle.net/10023/657
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Title: The cost of political intervention in monetary policy
Authors: Cobham, David
Papadopoulos, Athanasios
Zis, George
Editors: University of St Andrews. School of Economics and Finance
Keywords: monetary policy
time-inconsistency
credibility
Issue Date: 2001
Citation: School of Economics and Finance discussion paper series ; 0114
Abstract: Data from a unique monetary ‘experiment’ conducted in the UK during the period 1994-97 are used to investigate the cost of political intervention in monetary policy. The paper finds that the difference between government bond yields in Germany (but not the US) and the UK was systematically related to an index of the credibility of monetary policy constructed on the basis of the frequency of agreements/ disagreements between the Minister of Finance who took the decisions on interest rates and the Bank of England, whose recommendations were published with a lag, with disagreements causing an increase in the yield differential.
Version: Postprint
Description: Previously in the University eprints HAIRST pilot service at http://eprints.st-andrews.ac.uk/archive/00000055/
Revised November 2001
URI: http://ideas.repec.org/p/san/wpecon/0114.html
http://hdl.handle.net/10023/657
ISSN: 0962-4031
Type: Working or discussion paper
Publication Status: Not published
Status: Non peer reviewed
Publisher: School of Economics and Finance, University of St Andrews.
Appears in Collections:School of Economics and Finance Discussion Paper Series 2001



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