An uneven playing field: larger EU member states receive weaker Commission oversight than smaller states

The EU’s fiscal oversight mechanism, the Stability and Growth Pact, which sets limits on states’ budget deficits and debt levels, was insufficient to prevent the Eurozone crisis from occurring. Nicole Rae Baerg notes that if European states are to learn from this failure, it is important to understand why the system lacked credibility. Presenting evidence from a recent study, she writes that larger and more Eurosceptic states have received weaker levels of oversight from the Commission than smaller states, and that the ability of more powerful states to alter Commission recommendations should be a key area of concern for policymakers who would like to see credible European safeguards put in place

A Textual Taylor Rule: Estimating Central Bank Preferences Combining Topic and Scaling Methods

Scholars often use voting data to estimate central bankers' policy preferences but consensus voting is commonplace. To get around this, we combine topic-based text analysis and scaling methods to generate theoretically motivated comparative measures of central bank preferences on the U.S. Federal Open Market Committee leading up to the financial crisis in a way that does not depend on voting behavior. We apply these measures to a number of applications in the literature. For example, we find that FOMC members that are Federal Reserve Bank Presidents from districts experiencing higher unemployment are also more likely to emphasize unemployment in their speech. We also confirm that committee members on schedule to vote are more likely to express consensus opinion than their off schedule voting counterparts and show that it is Dovish rather than Hawkish members who are more likely to want to amend the official monetary policy statement

Financial development, remittances, and real exchange rate appreciation

For developing countries, remittances are an important and expanding source of capital, equivalent to two-thirds of overall foreign direct investment and nearly 2 percent of gross domestic product. ; This article examines the relationship between remittance inflows, financial sector development, and the real exchange rate. The authors test whether financial sector development can prevent appreciation of the real exchange rate. In particular, they show that well-developed financial sectors can more effectively channel remittances into investment opportunities. ; Using panel data for 109 developing and transition countries for 1990–2003, the authors find that remittances by themselves tend to put upward pressure on the real exchange rate. But this effect is weaker in countries with deeper and more sophisticated financial markets, which seem to retain trade competitiveness.Emigrant remittances ; Foreign exchange rates

Opportunistic, not Optimal Delegation: The Political Origins of Central Bank Independence

Economists have long argued that central banks ran by technocrats have greater independence from the government. But in many countries, politically experienced central bankers are at the helm, including even highly independent central banks. To explain the level of central bank independence awarded, we develop a formal model where nominating politicians screen central bankers for their political ambitions. We show how screening and reelection efforts by the nominating politician changes the level of autonomy associated with different types of candidates. We predict that technocrats are associated with higher levels of independence than nominees with political experience, but as the appointing politician faces tougher reelection, candidates with political experience are associated with higher independence as well. We test our theory using new data from 29 post-communist countries between 1990-2012. We find evidence that the reelection strategy of the nominating politician is an important predictor of the level of central bank independence

War of the Words: How Elites' Communication Changes the Economy

How does variation in the clarity of elites’ communication change the economy? Previous re- search shows that elites’ communication changes the economy, but not all messages are crafted equally. Models of strategic communication suggests that clearer and precise information can improve the economy more than ambiguous messages. In order to test this claim, I develop a new dataset of political elites’ inflation statements and measure each statements’ information precision. I then test whether or not economic performance depends on how precisely political elites communicate. I find evidence that an increase in information precision, through its attenuating effects on inflation expectations, lowers inflation. Furthermore, I find that this is true when examining a number of developing countries over a relatively volatile time period

War of the Words: How Elites' Communication Changes the Economy

How does variation in the clarity of elites’ communication change the economy? Previous re- search shows that elites’ communication changes the economy, but not all messages are crafted equally. Models of strategic communication suggests that clearer and precise information can improve the economy more than ambiguous messages. In order to test this claim, I develop a new dataset of political elites’ inflation statements and measure each statements’ information precision. I then test whether or not economic performance depends on how precisely political elites communicate. I find evidence that an increase in information precision, through its attenuating effects on inflation expectations, lowers inflation. Furthermore, I find that this is true when examining a number of developing countries over a relatively volatile time period

Council Checks of the Commission under the European Semester: Does Member State Power and Euroskepticism Still Matter?

The European Commission recommends evaluations of the economic plans of member states. The Council then provides final text. Previous research suggests that the Council selectively edits the Commission’s recommendations. Both large member states and those with euroskeptic populations are likely to have the Council weaken what the Commission writes about them. We examine the determinants of the Council’s editing of these texts after the introduction of the European Semester in the period 2011-2018. We also account for different varieties of euroskepticism as the literature has become more differentiated than before. Using metrics of textual changes based on automated and hand-coding, we find little evidence of a systematic relationship between euroskepticism and textual editing. We do however find evidence that member state’s voting power and euro status matters. Our findings are suggestive in that any political channel that euroskepticism played in driving textual editing is no longer operating under the European Semester

Unauthorized Immigration and Electoral Outcomes

How do inflows of unauthorized immigrants shape elections? Political economy theories often yield competing predictions and mixed empirical results. The main hurdle of empirically evaluating the impact of unauthorized immigrants on election outcomes is finding reliable data that can measure unauthorized immigration flows over time. Using a unique methodology for identifying undocumented workers across counties in the state of Georgia in the United States, we find a positive relationship between the share of the county's workforce that is unauthorized and the share of votes going to Republicans in elections. Furthermore, we show that this effect is more pronounced for the presence of unauthorized immigrants than Hispanics; is stronger in counties with higher median household income; and is substantively larger in U.S. Congressional elections than Gubernatorial or Senatorial elections. We discuss which political economy theories are most consistent with this set of findings

Unauthorized Immigration, Fiscal Conservatism, and Partisan Support for the Republicans

Using a unique methodology for identifying unauthorized immigrants across counties in the state of Georgia in the United States, we show that an increase in unauthorized immigrants is associated with natives holding more restrictive views against social welfare provision. We also find a positive relationship between the population share of unauthorized immigrants and the share of votes going to the Republicans in elections. Furthermore, we show that this effect is more pronounced for the presence of unauthorized immigrants than Hispanics; is stronger in counties with higher median household income; and is substantively larger in U.S. Congressional elections