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Targeting inflation targeting: the influence of interest groups

Author

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  • Jac C. Heckelman

    (Wake Forest University)

  • Bonnie Wilson

    (Saint Louis University)

Abstract

We examine whether sectional interest groups influence monetary policy goals in a manner consistent with their interests as distributive coalitions. In particular, we explore whether bank groups and labor groups are associated with the incidence of inflation targeting by the central bank. Controlling for a variety of economic and institutional factors, our main findings reveal that bank groups are associated with a higher probability that a country is an inflation-targeter while labor groups are associated with a lower probability. The findings are conditional on the level of democracy and on aspects of central bank independence.

Suggested Citation

  • Jac C. Heckelman & Bonnie Wilson, 2021. "Targeting inflation targeting: the influence of interest groups," Public Choice, Springer, vol. 189(3), pages 533-554, December.
    • Handle: RePEc:kap:pubcho:v:189:y:2021:i:3:d:10.1007_s11127-021-00905-x
    DOI: 10.1007/s11127-021-00905-x
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    Cited by:

    1. Fraccaroli, Nicolò & Giovannini, Alessandro & Jamet, Jean-François & Persson, Eric, 2022. "Ideology and monetary policy. The role of political parties’ stances in the European Central Bank’s parliamentary hearings," European Journal of Political Economy, Elsevier, vol. 74(C).
    2. Heckelman, Jac C & Wilson, Bonnie, 2023. "Aid, Reform, and Interest Groups," MPRA Paper 118182, University Library of Munich, Germany.
    3. Louis Rouanet & Peter Hazlett, 2023. "The redistributive politics of monetary policy," Public Choice, Springer, vol. 194(1), pages 1-26, January.
    4. Fraccaroli, Nicolò & Giovannini, Alessandro & Jamet, Jean-Francois & Persson, Eric, 2022. "Ideology and monetary policy: the role of political parties’ stances in the ECB’s parliamentary hearings," Working Paper Series 2655, European Central Bank.

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    More about this item

    Keywords

    Monetary policy; Inflation targeting; Special interests;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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