Jeroen Klomp

Inflation and Central Bank Independence: A Meta Regression Analysis

Using 59 studies, we perform a meta-regression analysis of studies examining the relationship between inflation and central bank independence (CBI). The studies considered are very different with respect to the CBI indicator used, the sample of countries and time periods covered, model specification, estimators used and publication outlet. We conclude that there is a significant publication bias. However, we also find a significant genuine effect of CBI on inflation. Differences between studies are not caused by differences in CBI indicators used.

Do political budget cycles really exist

Most recent cross-country studies on election-motivated fiscal policy assume that the data can be pooled. As various tests suggest that our data for some 70 democratic countries for the period 1970–2007 cannot be pooled, we use the Pooled Mean Group (PMG) estimator to test whether Political Budget Cycles (PBCs) exist in our sample. We find that fiscal policy is only affected by upcoming elections in the short run. Our results suggest that the occurrence of a PBC is conditional on the level of development and democracy, government transparency, the countrys political system, its membership of a monetary union and its degree of political polarization.

Is the political system really related to health

We analyze whether the political system and its stability are related to cross-country differences in health. We apply factor analysis on various national health indicators for a large sample of countries over the period 2000-2005 and use the outcomes of the factor analysis to construct two new health measures, i.e., the health of individuals and the quality of the health care sector. Using a cross-country structural equation model with various economic and demographic control variables, we examine the relationship between the type of regime and political stability on the one hand and health on the other. The political variables and the control variables are measured as averages over the period 1980-1999. Our results suggest that democracy has a positive relationship with the health of individuals, while regime instability has a negative relationship with the health of individuals. Government instability is negatively related to individual health via its link with the quality of the health care sector, while democracy is positively related with individual health through its link with income. Our main findings are confirmed by the results of a panel model and various sensitivity tests.

Bank regulation, the quality of institutions, and banking risk in emerging and developing countries: : An empirical analysis

Abstract: Using data for 371 banks from nonindustrial countries for the period 2002–8, we examine the effect of bank regulation and supervision on banking risk. Our main findings suggest that stricter regulation and supervision reduces banking risk. Notably, capital regulations and supervisory control reduce bank riskiness. Liquidity regulation and activities restrictions also restrain banking risk but only when there is a high level of institutional quality. Finally, we find that the effect of regulation and supervision also depends on the level of development.

Conditional Election and Partisan Cycles in Government Support to the Agricultural Sector: An Empirical Analysis

We examine the effect of elections and government ideology on public funding to the agricultural sector using a panel model for more than 70 democratic countries from 1975-2009. We find that support for agriculture increases prior to elections, and that right-wing governments redistribute more income to the agricultural sector than left-wing governments. Political cycles are conditional on certain factors; for example, elections have a stronger effect on support under right-wing cabinets. Further, in industrialized countries, the election (partisan) effect is strongest under majoritarian (proportional) electoral systems. In developing countries, the election (partisan) effect is strongest under proportional (majoritarian) electoral systems. Copyright 2013, Oxford University Press.

Measuring Health: A Multivariate Approach

We examined the health status of 171 countries by employing factor analysis on various national health indicators for the period 2000–2005 to construct two new measures on health. The first measure is based on the health of individuals and the second on (the quality of) the health services. Our measures differ substantially from indicators used in previous studies on health and also lead to different rankings of countries. As rankings are not that informative without further information, we analyzed the distance between each country and the sample mean. Differences between countries are much more pronounced for our measure on health services than for our measure on the health of individuals. Using cluster analysis, we classified the countries in six homogenous groups.

Political Regime and Human Capital: A Cross-Country Analysis

We examine the relationship between different dimensions of the political regime in place and human capital using a two-step structural equation model. In the first step, we employ factor analysis on 16 human capital indicators to construct two new human capital measures (basic and advanced human capital). In the second step, we estimate the impact of our political variables on human capital, using a cross-sectional structural model for some 100 countries. We conclude that democracy is positively related to basic human capital, while regime instability has a negative link with basic human capital. Governance has a positive relationship with advanced human capital, while government instability has a negative link with advanced human capital. Finally, we also find an indirect positive effect of governance and democracy on both types of human capital through their effect on income.

Sovereign Risk and Natural Disasters in Emerging Markets

ABSTRACT In this article, we explore the effect of large-scale natural disasters on sovereign default risk. We use a heterogeneous dynamic panel model including a set of more than 380 large-scale natural disasters for about forty emerging market countries in the period 1999–2010. After testing for the sensitivity of the results, our main findings suggest that natural disasters significantly increase the sovereign default premium paid by bond holders. That is, investors perceive natural disasters as an adverse shock that makes the government debt less sustainable and eventually triggers a sovereign default. In particular, it turns out that geophysical and meteorological disasters increase the credit default premium in both the long run as well as in the short run, while hydrological disasters have only a temporary effect.

INFLATION AND CENTRAL BANK INDEPENDENCE

Using 59 studies, we perform a meta-regression analysis of studies examining the relationship between inflation and central bank independence (CBI). The studies considered are very different with respect to the CBI indicator used, the sample of countries and time periods covered, model specification, estimators used and publication outlet. We conclude that there is a significant publication bias. However, we also find a significant genuine effect of CBI on inflation. Differences between studies are not caused by differences in CBI indicators used.

INFLATION AND CENTRAL BANK INDEPENDENCE: A META-REGRESSION ANALYSIS: INFLATION AND CENTRAL BANK INDEPENDENCE

Using 59 studies, we perform a meta-regression analysis of studies examining the relationship between inflation and central bank independence (CBI). The studies considered are very different with respect to the CBI indicator used, the sample of countries and time periods covered, model specification, estimators used and publication outlet. We conclude that there is a significant publication bias. However, we also find a significant genuine effect of CBI on inflation. Differences between studies are not caused by differences in CBI indicators used.