Unemployment benefits as a substitute for a conservative central banker

• 成果类型: Article
• 署名作者: Di Tella, R; MacCulloch, R
• 署名单位: Harvard University; Imperial College London
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• 发表日期: 2004-11
• 页码: 911-922
• 关键词: inflation; openness

摘要

In the many years since their introduction, positive theories of inflation have rarely been tested. This paper documents a negative relationship between inflation and the welfare state (proxied by the parameters of the unemployment benefit program) that is to be expected in such theories. Because unemployment benefits make the monetary authority less concerned about the plight of the unemployed, building a welfare state has a similar effect to appointing a conservative central banker. The relationship holds in a panel of 20 OECD countries over the period 1961-1992. a region where Romer finds no evidence of commitment problems. It holds controlling for country and time fixed effects, country-specific time trends, other covariates, and using a decadal panel. Interpreted as causal, the estimated effect is economically large: a 1-standard-deviation decrease in benefit duration is predicted to add 1.4 percentage point:; onto inflation, or 31% of the standard deviation in inflation.