Arbeitspapier

How do exchange rates respond to political rhetoric by populist leaders?

With the global rise in authoritarianism, there has been an increase in political commentaries by the populist leaders that have criticized their central banks in favor of lower interest rates. We analyze the effects of these political pressures on exchange rates. We provide strong empirical evidence where political commentaries affect both the level and the volatility of exchange rate returns. The intensity of political pressures as well as institutional strength play a key role in determining the size of the impact.

Language
Englisch

Bibliographic citation
Series: Working Paper ; No. 2112

Classification
Wirtschaft
Foreign Exchange
Subject
Political pressure
exchange rate
time inconsistency
populism

Event
Geistige Schöpfung
(who)
Çakmaklı, Cem
Demiralp, Selva
Güneş, Gökhan Şahin
Event
Veröffentlichung
(who)
Koç University-TÜSIAD Economic Research Forum (ERF)
(where)
Istanbul
(when)
2021

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Çakmaklı, Cem
  • Demiralp, Selva
  • Güneş, Gökhan Şahin
  • Koç University-TÜSIAD Economic Research Forum (ERF)

Time of origin

  • 2021

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