TY  - JOUR
AU  - Edwards, Sebastian
AU  - Tabellini, Guido
TI  - Political Instability, Political Weakness and Inflation: An Empirical Analysis
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3721
PY  - 1991
Y2  - May 1991
DO  - 10.3386/w3721
UR  - http://www.nber.org/papers/w3721
L1  - http://www.nber.org/papers/w3721.pdf
N1  - Author contact info:
Sebastian Edwards
UCLA Anderson Graduate School of Management
110 Westwood Plaza, Suite C508
Box 951481
Los Angeles, CA 90095-1481
Tel: 310/206-6797
Fax: 310/206-5825
E-Mail: sebastian.edwards@anderson.ucla.edu

Guido Tabellini
IGIER Universita' Bocconi
Via Roentgen 1
20136 Milano
Italy
Tel: 39 2 583 6 3305
E-Mail: guido.tabellini@unibocconi.it
AB  - In this paper we analyze empirically the most important implications of two family political economy models of inflation: the "myopic? government approach and the "weak" government approach. In myopic government models inflation is the deliberate outcome of politicians strategic behavior, while in weak government models inflation is the unavoidable result of a political struggle between different factions. In testing the implications of these two models we use a new data set on political developments in 76 countries for the period 1971-1982. Using a number of alternative definitions of the inflation tax we find out that the data supports the implications of the myopic governments models; countries with a more unstable political environment tend to rely more heavily on the inflation tax. There is no evidence in favor of the weak government hypothesis.
ER  -