Can the exchange rate regime influence corruption? / Katherina Popkova
VerfasserPopkova, Katherina
ErschienenSiegen : Universität Siegen, Fakultät III, October 2011
Elektronische Ressource
Umfang1 Online-Ressource (19 Seiten)
SerieVolkswirtschaftliche Diskussionsbeiträge ; No. 148-11
SchlagwörterInternationales Währungssystem In Wikipedia suchen nach Internationales Währungssystem / Korruption In Wikipedia suchen nach Korruption
URNurn:nbn:de:hbz:6:2-91020 Persistent Identifier (URN)
 Das Dokument ist frei verfügbar.
Can the exchange rate regime influence corruption? [0.19 mb]

This paper analyses the influence of the exchange rate regime of a country on the level of tolerated corruption with a special focus on the interdependency of monetary and fiscal policies. Using a simple theoretical framework based on Barro-Gordon-Model I compare independent monetary policy with a tight peg arrangement in order to find out which regime is more likely to induce governments to intensify the fight against corruption. It is shown that if corruption has a considerable positive impact on output, a tight peg regime can increase tolerated corruption. However, if corruption has a negative effect on output, a pegged exchange rate regime will lead to a lower level of tolerated corruption. The issue of particular interest appears to be the finding that a strong positive impact of corruption on output can induce governments to choose a pegging regime while a weak positive impact of corruption (and a negative influence of corruption even more) provides an incentive to keep monetary independence. -- Exchange Rate Regime ; Monetary Policy ; Fiscal Policy ; Corruption