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Financing divided governments

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  • Hakan Berument

Abstract

This paper finds that when the Congress and Presidency are controlled by the different political parties in the USA the creation of the seigniorage revenue to finance spending is not higher than when those two branches are controlled by the same party. However, the hypothesis that the creation of seigniorage revenue was lower during the period when the country had a fixed exchange rate regime was partially supported.

Suggested Citation

  • Hakan Berument, 1997. "Financing divided governments," Applied Economics Letters, Taylor & Francis Journals, vol. 4(6), pages 369-372.
    • Handle: RePEc:taf:apeclt:v:4:y:1997:i:6:p:369-372
    DOI: 10.1080/135048597355320
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    References listed on IDEAS

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    1. Burdekin, Richard C K, 1991. "Inflation and Taxation with Optimizing Governments: A Comment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(2), pages 267-269, May.
    2. Andrabi, Tahir, 1997. "Seigniorage, Taxation, and Weak Government," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(1), pages 106-126, February.
    3. Milton Friedman & Anna J. Schwartz, 1982. "Monetary Trends in the United States and United Kingdom: Their Relation to Income, Prices, and Interest Rates, 1867–1975," NBER Books, National Bureau of Economic Research, Inc, number frie82-2, January.
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    6. Cukierman Alex, 1992. "CENTRAL BANK STRATEGY, CREDIBILITY, AND INDEPENDANCE: THEORY AND EVIDENCE: Compte Rendu par Dominique Cariofillo," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 3(4), pages 581-590, December.
    7. Poterba, James M & Rotemberg, Julio J, 1990. "Inflation and Taxation with Optimizing Governments," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(1), pages 1-18, February.
    8. Poterba, James M, 1994. "State Responses to Fiscal Crises: The Effects of Budgetary Institutions and Politics," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 799-821, August.
    9. Trehan, Bharat & Walsh, Carl E., 1990. "Seigniorage and tax smoothing in the United States 1914-1986," Journal of Monetary Economics, Elsevier, vol. 25(1), pages 97-112, January.
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    Cited by:

    1. Ümit Özlale & Kivilcim Metin Ozcan, 2005. "Does Time Inconsistency Problem Apply For Turkish Monetary Policy?," Working Papers 2005/2, Turkish Economic Association.
    2. Jac Heckelman, 1998. "Financing divided and unified partisan governments," Applied Economics Letters, Taylor & Francis Journals, vol. 5(12), pages 789-791.

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