Wage Inflation, Electoral Uncertainty and the Exchange Rate Regime: Theory and UK Evidence

摘要: The authors extend the "rational partisan" model of inflation to allow for effects unemployment persistence on dynamics inflation. combine this with "exchange-rate-regime" inflation, and examine experience United Kingdom. Outside fixed exchange rate regime Bretton Woods, persistently high can be attributed failure political parties precommit price stability, in light persistence. Election times are associated higher exception Thatcher period. There is no evidence that Labour party general more tolerant than Conservatives. Copyright 1992 by Royal Economic Society.