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What might motivate a central banker to cause a political business cycle? What does the political business cycle imply for the debate over policy rules?
Principles of Macroeconomics (Mind...
Solutions
Principles of Macroeconomics (Mind...
What might motivate a central banker to cause a political business cycle? What does the political business cycle imply for the debate over policy rules?
Explanation of Solution
Central bankers are sometimes tempted to use monetary policy for political business events by influencing the outcomes of elections. A central banker who might be sympathetic to the incumbent knows that the vote is based on the economic conditions at that ...
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