Replication data for: Multiple Hands on the Wheel: Empirically Modeling Partial Delegation and Shared Control of Monetary Policy in the Open and Institutionalized Economy

Previous work showed that, when partially autonomous central banks (CBs) and politically responsive governments share monetary-policymaking control, inflation occurs as a convex combination of the rates that would have occurred if the government fully controlled monetary policy and if, instead, the CB had full control. Thus, the anti-inflation effects of CB autonomy and conservatism (CBA) depend on all political-economic variables to which CBs and governments would respond differently and, vice versa, the degree of CBA mutes the inflation effects of all such variables. This paper extends that logic of shared policy control to open political economies under differing exchange-rate regimes and degrees of international financial exposure. When domestic monetary authorities fully commit to fixed exchange-rates, they effectively delegate domestic inflation-control to foreign authorities. Similarly, in small, financially open economies, domestic policymakers must match domestic to foreign inflation to avoid massive exchange-rate pressures under any exchange regime. The new implications extend intuitively from the closed-economy case. Broadly, the domestic-inflation effects of pegs and financial exposure depend on each other and on many other institutional and structural characteristics of the domestic and foreign political economies, and, vice versa, the domestic-inflation effects of domestic and foreign political-economic conditions depend on exchange regimes and degrees of financial openness at home and abroad. The paper then shows how to model such complexly interactive hypotheses empirically compactly and substantively meaningfully and demonstrates that the postwar inflation records of 21 developed democracies decidedly favor such specifications over less theoretically- informed linear or linear-interactive alternatives . The conclusion illustrates several specific examples of this general result and discusses potential applications of this approach to other instances of shared policy-control.