European Journal of Political Economy

Vol. 14 1998. 241263

Inflation culture, central bank independence and

price stability
Bernd Hayo

Department of Economics, Uniersity of Bamberg, Feldkirchenstr. 21, 96045 Bamberg, Germany

Revised 1 January 1997; accepted 1 May 1997

Abstract
This paper proposes that central bank independence alone is insufficient to explain low
inflation. It argues instead that central bank independence may be interconnected with
public attitudes towards inflation via a historical feedback process that has led to an
anti-inflation culture and public consensus on monetary stability in countries with low
inflation rates. Using survey data from European Community members over the period
19761993, I find supportive evidence of the existence of a stability culture in low-inflation
countries. In their assessment of the importance of price stability, people living in countries
with a low inflation record appear to be more sensitive to an increase in the actual inflation
rate than people in higher-inflation countries. q 1998 Elsevier Science B.V. All rights
reserved.
JEL classification: E42; E31
Keywords: Inflation; Inflation culture; Central bank independence; European Community

1. Introduction
Price stability is a central issue in the discussion of European Monetary Union
EMU.. Many of the studies in the literature on EMU use an institutional or
)
Corresponding author at present address: Rheinische Friedrich - Wilhelms - Universitat Bonn, ZEI,
University of Bonn, Walter-Flex-Str. 3, D-53113 Bonn, Germany, Tel.: q49 228 731878; fax: q49
228 731809; E-mail: hayo@sfbb4.econ1.uni-bonn.de

0176-2680r98r$19.00 q 1998 Elsevier Science B.V. All rights reserved.

PII S 0 1 7 6 - 2 6 8 0 9 8 . 0 0 0 0 6 - 8

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B. Hayo r European Journal of Political Economy 14 (1998) 241263

game-theoretic framework to analyse the optimal design of a European Central

Bank ECB. that would ensure stable prices. 1 The German Bundesbank Law is
often cited as an example for the design of a ECB and has influenced the relevant
articles Article 105 and following. in the Treaty of Maastricht: the Treaty
postulates an institution which is at least legally as independent as the Bundesbank
see Eichengreen, 1993.. Such independence is often considered as sufficient to
overcome problems of time-inconsistency and seigniorage see Fischer, 1995.,
although McCallum 1995. argues that time-inconsistency and optimal contracts
are not the most important issues, but rather the independence of the central bank
from everyday political pressures. In this paper, I will refer to this selection of
arguments, centering on central bank independence for achieving stable prices, as
the orthodox view.
The theoretical literature on the orthodox view is supported by empirical
studies. Alesina 1988. and Grilli et al. 1991. investigate the causal relation
between the degree of central bank independence and the rate of inflation also see
Alesina and Grilli, 1992., and observe that the greater the independence of a
countrys central bank, the lower its inflation rate. Similar results are obtained by
De Haan and Sturm 1992..
Yet although this orthodox view prevails within mainstream macroeconomics,
there remain some doubts in the profession that this is the whole story. 2
One strand of thinking within the orthodox view questions the exogeneity of
central bank independence. As suggested for instance by Cukierman 1994b., there
may exist political and economic factors influencing the degree of legal independence granted to the central bank. The main trade-off here is between credibility
and flexibility of monetary policy for the incumbent governing party. A lack of
credibility results in expectations of rising prices, causing an inflationary bias in
the economy. The inflationary bias leads economic agents to adjust their behaviour
accordingly, with the outcome being higher interest rates and wage increases.
Granting more independence to the central bank raises credibility, but reduces the
discretionary use of monetary policy by the government, and vice versa. Two
hypotheses relating to the inflationary bias are tested by De Haan and vant Hag
1995. using cross-section data from 19 countries. First, they investigate the
relationship between central bank independence as dependent variables and proxies for the inflationary biases as independent variables. Second, they test the
hypothesis that governments planning to incur higher deficits may wish to increase
credibility, to reduce the interest premium associated with expectations of high
future inflation rates. No supporting evidence is found for either of the two

1994..
See, e.g., Bean 1992., Cukierman 1994a., Treutler 1993., von Hagen and Suppel

Obviously, I build up some kind of straw-man for a better focus of the discussion. As everyday
experience shows, most economists are not that fundamentally oriented anyway.
2

B. Hayo r European Journal of Political Economy 14 (1998) 241263

243

hypotheses relating central bank independence and inflationary bias. This suggests
that the story of Cukierman 1994b. may not suffice to explain why some
countries have independent central banks and low inflation rates, and others do
not.
A different approach, set out for example by Posen 1993., questions the
credibility of the mainstream answer as to why central bank independence causes
lower inflation rates. His view is that political interest groups have specific
inflation preferences, in particular the interest of the financial sector lies in
keeping inflation low. Posen thus proposes that it is inappropriate to focus on
institutional design in the creation of independent central banks, while neglecting
the political self-interest calculations. Hence the political-interest group hypothesis
is a challenge to the economic orthodox view. But there clearly exist problems in
identifying agents preferences. Does the financial sector indeed benefit from low
inflation rates? There are of course the usual collective action problems as well.
Changes in the structure of the financial sector should influence its effectiveness
as a lobbying group, which should then be revealed by fluctuations in inflation
rates. Based on some empirical tests, De Haan and vant Hag 1995. also raise
doubts about the generality of Posens claims.
Another approach, associated with political business cycles, suggests that
central banks, even if ostensibly independent, can be captured. Vaubel 1997.
proposes that since overseers of central bank policy are political appointments,
central bank policy may be politicised. Vaubel presents evidence with regard to
the Bundesbank, which is critically evaluated by Berger and Woitek 1997.. Sieg
1997. formulates a formal model of such opportunistic behaviour by a captured
independent central bank.
The approach which I wish to consider here takes as its point of departure a still
different literature which points to a deep-rooted aversion to inflation in the
population see, for example, Bofinger, 1992 or Treutler, 1993.. It is argued, for
example, that the experience of two hyperinflations during the 20th century have
created a strong fear of inflation in the German population. The corresponding
hypothesis is that peoples preferences with respect to price stability matterat
least in Germanyin explaining low inflation rates.
Collins and Giavazzi 1993. try to identify different inflation preferences in the
form of attitudes. in Europe. Using time-series data of inflation and unemployment
expectations to explain the publics assessment of the overall economic situation,
they attempt to measure the corresponding weights of a widely used economic loss
function see, e.g., Barro and Gordon, 1983.. They claim that in the 1980s a
structural change occurred in the weights, towards increased preferences for lower
inflation. Moreover, they propose that their results indicate convergence of public
attitudes on inflation in Europe over time. Their approach and findings are
however controversial and not without critics see Fratianni, 1993; Thygesen,
1993..
In this paper, I maintain only some parts of the orthodox framework, but

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emphasise instead the role of a consensus on attitudes towards inflation. 3 The

alternative hypothesis put forward is based on the idea of a specific inflation
culture in the respective societies. This will allow for a somewhat different and,
arguably, more convincing reading of the various inflation histories of European.
countries. The formal-institutional design of a central bank is thus only one aspect
of a stability regime, to be supplemented with public attitudes towards the goal of
price stability in explaining inflation differentials among countries, and public
perception that price stability is important becomes a significant precondition for
achieving a low inflation rate.
The empirical literature on central bank independence cannot be used to
contradict this position, since it cannot by itself answer the crucial question of
causality see also Forder 1996... That is, is the prime reason for low inflation an
independent central bank? Or is it the case that countries with a population which
places a high value on price stability have designed their central banks accordingly?
With regard to the EMU, the implication is that ECB independence is not
enough to achieve low inflation rate in Europe. A public consensus on the need for
price stability is required to make the formal independence of a central bank
effective. In the absence of such a consensus, interest groups may influence
monetary policy or decision makers may interpret fixed objectives as soft constraints e.g., when is price stability endangered?.. 4
My principal aim is to cast doubt on the adequacy of the orthodox model as a
sufficient interpretation of recent monetary history. 5 The data sources are European public opinion polls on how people in the different countries of the European
Community EC. value price stability annual observations from 1976 to 1993
taken from the Eurobarometer surveys.. In Section 2 I consider the relationship
between the orthodox and my model, and present possible transmission mechanisms from preferences to monetary policy. Section 3 explains the research design,
provides a short summary of the data, and compares the importance of inflation in
the members of the EC. Section 4 investigates the relation between the inflation
goal and actual inflation rates using alternative estimators. Section 5 discusses the

3
For convenience, preferences and attitudes are used interchangeably, though in principle, I regard
attitudes as empirically measurable proxies of preferences.
4
From a different perspective, the importance of preferences towards inflation is stressed by
Morales and Padilla 1995.. Based on their theoretical model, they maintain that a majority voting
procedure in the governing council of a ECB leads only to an efficient outcome, if the members have
similar preferences on monetary policy. If one assumes, as is usually done, that the members of the
governing council reflect the public view towards inflation that prevails in their home countries, then
looking at the preferences of people in Europe might be important in this respect too.
5
For the sake of simplicity, I do not take into account that inflation is not just a monetary
phenomenon and that it is influenced by other factors as well. I would maintain, though, that monetary
factors are generally the most important ones, at least in the longer run.

B. Hayo r European Journal of Political Economy 14 (1998) 241263

245

relation between my results and indicators of central bank independence. Section 6

provides a summary and suggests directions for further research.
2. Price stability, inflation culture and central bank independence
The attraction of the orthodox model lies in its combination of rigorous
theoretical foundations and empirical support, and that there is no other equally
coherent theory to explain diverging inflation records in the literature. I will
transform the orthodox view by placing public attitudes towards inflation at the
centre of the argument.
The rationale for my public-preference explanation is based on how central
bank independence and public attitudes towards inflation fit together. A straightforward interpretation regards the independence of a central bank as a means to
achieve the goal of low inflation rates as embodied in peoples preferences. This
type of interpretation seems to be, at least implicitly, present in many specifications of public objectives functions in the literature e.g., Barro and Gordon, 1983
or Cukierman, 1992.. I refer to this as the preference-instrument interpretation,
and it can be regarded as being built on the literature on economic policy in a
democracy and political business cycles. 6 Two main submodels based on the
preference-instrument view can be identified.
In an election-oriented scenario, we assume that people havefor whatever
reasona preference for low inflation. The voting process allows people to
express their preferences for low inflation, either directly or indirectly. In the
former case, voters would directly elect the central bank governor see Downs,
1957.. In the latter case they elect a government with low inflation policies
political parties as described by the partisan view, see Alesina, 1988., and the
government appoints a conservative central banker who chooses an independent
anti-inflation monetary policy as envisaged by Rogoff 1985. and others. 7
A constitutional-oriented approach emphasises the institutional setting of the
central bank. We can assume a contract-based scenario, or a more evolutionary
one. In the contract-based scenario, we can imagine people deciding on the
creation of a central bank while being in, following the phrase used by Rawls
1971., the original position. If the publics preferences favour low inflation,
people will choose an independent central bank removed from direct political
pressures, like demands for financing higher government expenditures via increasing the money supply. In the evolutionary constitutional scenario, people also
value the achievement of price stability from the beginning, but because of
difficulties in understanding complexities of inflation, it takes some time for
6

A recent introductory summary of this literature is given in Keech 1995.; also see Frey 1983..
Preferences of voters may determine the weights of an economic policy welfare function as
assumed in most of the models in the tradition of Barro and Gordon 1983..
7

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people to get to know the usefulness of different instruments. From the alternative
means tried over time, an independent central bank evolves as the bestat least
for the momentway of keeping inflation low.
The question is whether the preference-instrument interpretationbased on one
of the above transmission mechanismsis a satisfactory explanation of preferences for low inflation. An important problem with the preference-instrument
interpretation is its clear-cut causal chain from preferences to outcomes. But it is
by no means obvious why preferences towards price stability should exist autonomously, especially since even professional economists do not fully understand
the phenomenon and consequences of inflation. It seems unlikely that people have
inflation genes that determine their preferences. Preferences about price stability
are rather part of the economic culture of a country, which is influenced by
historical experience. Economic culture is defined here as the values and attitudes
of a population on all aspects related to the economic system. 8 Consequently, the
sub-concept of an inflation culture attempts to capture the values and attitudes
people have with respect to the economic phenomenon of inflation.
For example, in the case of Germany it is often argued that peoples attitudes
are affected by experience with high inflation. De Haan and vant Hag 1995.
attempt to capture this by showing that countries with high inflation rates during
the period 19001940 are more likely to create an independent central bank later
on. Aversion to inflation may have its origins in past times of hyperinflation.
However, historical circumstances in themselves are not enough. The collective
economic history of a population must be translated into an economic culture.
Indeed, the historical evidence, even for Germany, indicates that central bank
independence does not reduce inflation as long as there exists no public consensus
on the primacy of this policy objective. 9
Therefore, I propose a different integration of the orthodox model and peoples
preferences, a transmission mechanism which allows for a feedback relationship
between the institutional framework of the central bank and attitudes towards
inflation. A historical-feedback interpretation assumes a world of change, where
neither preferences nor institutional structures are fixed, and the two elements can
reinforce one another. An explanation for the creation of independent central
banks based on such an historical-feedback interpretation runs along the following
lines. From their everyday experience, people perceive that inflation is bad, for

This reflects the seminal definition by Almond and Verba 1963. for the concept of a political
culture.
9
For example, in Germany, the directorate of the Reichsbank was given independence through the
Autonomiegesetz from 26 May 1922 see, e.g., p. 160 and following of Pfleiderer, 1976.. However,
hyperinflation increased further since the directorate considered the monetization of national budget
deficits as a necessity. Interestingly, the independence was granted due to pressure from the reparation
commission, which acted in the interest of the victorious countries of World War I. Thus it cannot be
understood as a reform law based on a public consensus in Germany.

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247

instance by having to adjust their spending behaviour to ever rising prices. They
think of ways to achieve more stable prices in a complex world, under conditions
where economic policy is subject to short-run political pressures cf. the interestgroup argument of Posen, 1993.. In view of the interest groups, society may wish
to tie its own hands with respect to short-run policy considerations. A solution is
to create an independent central bank committed to stable prices. Although such an
institution may achieve a somewhat lower rate of inflation and here is the
orthodox aspect., it will not be able to undertake a firm monetary policy without
public support. Over time, people begin to give credit to the independent central
bank for achieving lower inflation, especially if real costs of a stable anti-inflationary monetary policysuch as lower economic growth or more unemployment
are low on average: Grilli et al. 1991., for example, show that countries with a
relatively low inflation rate do not seem to experience corresponding output losses,
and Alesina and Summers 1993. conclude that there exists no obvious, direct
relation between central bank independence and income growth, unemployment or
interest rates. Such outcomes strengthen peoples beliefs that fighting inflation is
worthwhile, which again feeds back to increase support for an independent central
bank. Support for the independent central bank as an institution increases policy
effectiveness and the inflation rate can be further stabilised, and so forth. The
outcome is a consensus on price stability within the inflation culture of a
country. 10 As long as there are no exogenous shocks, society will support the
anti-inflationary policies of an independent central bank, even if this harms some
people in some circumstances. 11 Seen within this framework, an independent
central bank need not be viewed as an undemocratic institution cf. p. 1443 and
following of Cukierman, 1994a., even if voters have no direct control over
monetary policy.
However, can a stability consensus be achieved? In p. 422 and following,
Cukierman 1992. presents, for instance, a finding that the empirical relationship
between central bank independence and inflation is much weaker in developing
countries. He interprets this as due to a high turnover-rate of central bank
governors, reflecting a weakening of legal central bank independence by high
actual inflation. I interpret the empirical relationship differently, namely that a
consensus within society on the importance of fighting inflation has not yet. been
achieved in these countries. The performance of independent central banks has not
been impressive enough for people to support stabilising monetary policies, and,
due to a number of rigidities, monetary stabilisation in these countries induces
10

This type of mechanism offers connections to the literature on political culture and constitutional
economics. As an example of the former, see the influential work by Lipset 1988., where he attempted
to divide political support into aspects of legitimacy and efficacy. For the constitutional approach to
economics, see Buchanan 1977..
11
This does not, of course, exclude the possibility that everyday politics influences such an
institution. Again we can point to the view presented by Posen 1993..

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B. Hayo r European Journal of Political Economy 14 (1998) 241263

high real costs, at least in the short-run, which works against the stability
consensus. 12
Some of the countries in the empirical analysis which follows have more or less
tied their currencies to the German Mark, notably the Netherlands. One may argue
therefore that the Netherlands imports price stability via the exchange rate and not
through central bank independence. This argument does not constitute a problem
for my hypothesis. The exchange rate link external anchor. is just another way to
foster price stability. But it is only sustainable because it is supported by a
majority of people in the Netherlands who believe that fighting inflation is
important.
To conclude, even if one is not persuaded that attitudes towards inflation and
central bank independence are interrelated, it is apparent that we know less about
these issues than the economists talking solely of time-consistency problems and
central bank reputation would have us believe. What needs to be stressed is not
that these issues are generally irrelevant for understanding inflation, but rather that
they cover only some parts of the story, and perhaps not the most important parts
for explaining differences in inflation rates across countries.
Section 3 is concerned with the construction of an empirical indicator for the
importance people in the EC member states place upon the achievement of low
inflation.
3. Database and descriptive analysis
The database consists of public opinion polls Eurobarometers. from 1976 to
1993 in nine countries of the EC. For Greece we have observations since 1980 and
for Spain and Portugal from 1985 onwards. From the often large surveys, we focus
on the so-called Inglehart Index, which attempts to measure the change in peoples
values. Four goals of a state are presented to the respondents: 1. Maintain order,
2. More democracy, 3. Fighting rising prices, and 4. Protecting freedom of
speech. 13 The respondents are asked to name the goal which they consider to be
the most important for their country in the long-run. In another question, they
choose the goal which they consider to be of second priority.
The goal of inflation is measured relative to the other objectives. One could
argue that this is a disadvantage, since we are interested in an absolute indicator of
12

Cukierman 1992. does not propose simple causal explanations like my sketch of the orthodox
view. On the other hand, in his account of central bank independence on p. 445, a mechanism as
outlined above is not discussed. However, towards the end of his book p. 455., he mentions the
consensus within a society as a possible influence on successful stabilisation programmes in countries
such as Argentina or Brazil.
13
A detailed discussion of the two positions, materialism and postmaterialism is given, e.g., in
Inglehart 1977.. The items 1. and 3. should capture materialist thinking and 2. and 4. postmaterialist ideas.

B. Hayo r European Journal of Political Economy 14 (1998) 241263

249

importance of the inflation goal. But it is unlikely that a question like how
important do you consider the achievement of price stability? will yield more
insight. In answering this type of question, people experience no sanctions; it is a
soft question. Although the Inglehart Index does not really use hard questions,
it entails at least a trade-off. People have to decide on a specific item. If they
choose inflation, it is at the expense of other goals. Importance can a priori only be
measured on a relative scale, and the Inglehart Index sets out the underlying scale.
One potential problem with this framework is that an abnormal situation in a
country might bias peoples decisions. Since we cannot allow for special circumstances, apart from actual inflation, we confront possible measurement errors. An
example is Northern Ireland, where people put a much stronger emphasis on
maintaining order than in other countries. It is clear that the political situation in
this region cannot be called normal and I have excluded observations from
Northern Ireland from the analysis. 14
We also cannot be sure whether people, when naming the fight against inflation
as the first priority, express their aversion to rising prices or just their dislike of
decreasing real incomes. As argued by Cukierman 1996. on p. 22, it may be the
case that historical experiences of high inflation only lead to institutional reforms
if they were accompanied by large losses in real income. The data at hand do not
permit us to disentangle these conceptually different types of motivations.
Another problem is the selection of alternative goals given in the question.
Maybe these are not the most significant goals. Then, even if people say that the
fight against inflation should be the first priority, it may not be worth much, since
the importance of the inflation goal is measured against low-valued alternatives.
For instance, it would have been interesting to have unemployment as an
alternative item. However, Hibbs 1979. and Fischer and Huizinga 1982. report
that inflation is perceived by the U.S. population as a more important issue than
unemployment. I maintain that the above goals are useful and any bias introduced
through this channel is likely to be small.
In the following sections I refer, for reasons of brevity, to the importance of the
inflation goal, but what is actually meant is the relative importance of fighting
rising prices versus the other objectives. I will look at two types of variables. One
is the share of people who consider price stability as the most prominent long-term
goal. The other includes the share of respondents who either believe fighting
inflation is the first or second most important objective. 15 The second variable
might give a more stable measure over time, since it is less influenced by current
events than the first.

14

In any case, including the appropriately weighted observations on Northern Ireland to the ones
used here for Great Britain does not change the country average very much.
15
See Tables A1 and A2 in Appendix A for a summary of the shares of the inflation goal in public
opinion.

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B. Hayo r European Journal of Political Economy 14 (1998) 241263

Fig. 1. Development of share of people in %. who consider the fight against inflation as the most
important goal of the state.

B. Hayo r European Journal of Political Economy 14 (1998) 241263

251

Table 1
Mean in %. and standard deviation of the share of people who consider the fight against inflation as
the most important goal 19761993, Greece 19801993., Spain and Portugal 19851993..
Fra 1 Bel 1 Net 1 Ger1 Ita 1
Mean
30.8 40.8 15.7
Standard deviation 3.9 7.9 6.0

19.4
8.5

Lux 1 Den 1 Ire1

23.0 23.1
4.4 9.2

13.3
5.2

GB1 Gre1 Spa 1 Por1

34.6 24.1 32.0

7.2 7.8 4.5

19.8
2.8

38.1
4.5

Variables containing only the fight against inflation as a first priority are
marked with an index 1, e.g., Fra 1 stands for the share of people in France who
consider keeping prices stable as the most important long-term goal of the state.
Correspondingly, variables including people who say the inflation goal is their first
or second priority, are indexed by 12, e.g., Ger12 denotes the share of the public
in Germany which believes that anti-inflation policy should be either the first or
the second most important objective.
In Fig. 1, the indicator for the importance of inflation in the EC countries is
plotted over time. Nine graphs Greece and Spain excluded. suggest a negative
trend. In Greece and Spain the series looks stationary. A similar structural picture
emerges if we look at the variables containing first and second priorities. To
describe the series in somewhat more detail, we find in Table 1 the mean and
standard deviations for the top priority variables. On average, about 25% of the
people in these European countries without taking account of the relative population size. considered the fight against rising prices to be the most important goal
of the state. The inflation objective plays a relatively prominent role in Belgium,
Portugal and Ireland, but is relatively unimportant in Denmark, the Netherlands
and Germany.
Table 2 gives the corresponding numbers for the variables containing first or
second priority. Here the simple mean across the EC countries is about 57%, i.e.,
more than one half of Europeans believe that the fight against rising prices should
be the first or second priority of the state. The highest proportion is found in
Portugal, followed by Greece and Belgium. Once again in Denmark, the Netherlands and Germany less importance is placed on this objective.
These results do not indicate that the absolute shares reflect the actual inflation
performance of the countries. It rather seems to be the case that the weight given

Table 2
Mean in %. and standard deviation of the share of people who consider the fight against inflation as
the first or second priority 19761993, Greece 19801993., Spain and Portugal 19851993..
Fra 12 Bel 12 Net 12 Ger12 Ita 12 Lux 12 Den 12 Ire12 GB12 Gre12 Spa 12 Por12
Mean
60.8 69.0
Standard deviation 9.7 7.7

39.7
10.7

47.7
13.7

59.1 53.1
8.8 14.2

39.5
13.6

67.4 51.6
8.1 9.8

69.9
4.3

54.6
5.3

73.8
3.4

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B. Hayo r European Journal of Political Economy 14 (1998) 241263

Table 3
Mean and standard deviation of inflation rates in the EC 19761993, Greece 19851993., Spain and
Portugal 19841993.. a
FraIn BelIn NetIn GerIn ItaIn LuxIn DenIn IreIn GBIn GreIn SpaIn PorIn
Mean
6.9
Standard deviation 4.1

4.8
2.6

3.5
2.5

3.3
1.7

11.1 4.7
5.9 3.0

6.5
3.6

8.7
6.5

8.3
5.0

18.9
3.7

6.4
1.6

11.5
3.7

Source: OECD Economic Outlook 1988. and OECD Economic Outlook 1995..
The numbers given for mean and standard deviation are based on an arithmetic mean. The use of the
correct. geometric mean would not change any of the following results

to the goal of stable prices is relatively small in countries with a low inflation rate
and vice versa.
To make this point, in Table 3 the inflation averages of the EC countries are
recorded. 16
One can showthe actual numbers are omitted herethat there exists a
significant positive correlation between the importance of the goal of price
stability and actual inflation performance. Since it does not make any sense to
postulate a theoretical relation where a higher importance of the inflation goal
leads to higher inflation, it is presumably actual inflation that drives public opinion
on this issue. Hence in Section 4 we investigate the influence of actual inflation on
the two importance variables.

4. Importance of the inflation goal and actual inflation

It is interesting to assess the effect of actual inflation on the public opinion
variables. We would like to obtain a fundamental indicator of priorities, independent of everyday changes in inflation. To achieve this, we regress the importance
variables on actual inflation. The basic estimated equations are Eqs. 1a. and 1b.:
Importance1it s a 1 q b 1 Inflation it q u1it

1a .

Importance12 it s a 12 q b 12 Inflation it q u12 it

1b .

where: i s France, . . . , Portugal; Importance1it s share of people who consider the

fight against inflation as the first priority of the state; Importance12it s share of
people who consider the fight against inflation as the first or second priority of the
state; u1i and u12i s white noise error terms.
16

The numbers given for mean and standard deviation are based on an arithmetic mean. The use of
the correct. geometric mean would not change any of the following results.

B. Hayo r European Journal of Political Economy 14 (1998) 241263

253

Two interpretations of the regressions can be considered: First, we could argue

that the intercepts a 1 and a 12 capture the fundamental evaluation of the inflation
goal. If this explanation were correct, the orthodox view would imply that we
should not find any pattern in the data with respect to the estimators for the
constant term. My hypothesis would argue that the countries with a low inflation
rate should instead have a larger constant term than the high-inflation countries.
Second, we could concentrate on the sensitivity of the importance variables
with respect to actual inflation by looking at the estimates of the slope parameters
b 1 and b 12 . The orthodox view would maintain that there should not be any
significant differences in the parameters, whereas my hypothesis predicts higher
parameter estimates for the low inflation countries.
Table 4 summarises the estimates of the importance variables. The t-tests
indicate highly significant parameter estimates. For both importance variables, the
results are very similar. A glance at the intercept estimators makes clear that
countries with a high constant term are those countries exhibiting high inflation.
Neither the orthodox nor my hypothesis are supported by this measure. The use of
the a 1 and a 12 parameters does not appear to be successful.
With respect to the slope parameter, we do find an interesting relation:
Countries with a relatively low inflation rate tend to have a higher slope parameter
estimate. This result contrasts with a naive version of the orthodox view and
corresponds to what one would have expected under my alternative hypothesis. In
other words, countries where the population reacts rather sensitively to an increase
in the inflation rate are performing better in keeping prices stable. This result
points to a stability consensus within the economic culture of low-inflation
countries.
Table 4
OLS-regression of first priority on inflation and first and second priority on inflation 19761993,
Greece 19801993., Spain and Portugal 19851993..
State

a 1

b1

R2

DW

State

a 12

b12

R2

DW

Fra 1
Bel 1
Net 1
Ger1
Ita 1
Lux 1
Den 1
Ire1
GB1
Gre1
Spa 1
Por1

18.4))
30.8))
8.3))
8.7)
16.2))
14.7))
4.9))
27.4))
11.9))
25.5))
19.6))
27.6))

1.81))
2.09))
2.09))
3.28))
0.62))
1.78)
1.30))
0.82))
1.47))
0.34
0.04
0.92)

0.69
0.49
0.79
0.44
0.68
0.32
0.84
0.54
0.87
0.08
0.0004
0.56

0.7))
0.6))
1.0)
0.3))
1.5
0.4))
1.5
1.0)
2.1
1.9
2.6
0.6))

Fra 12
Bel 12
Net 12
Ger12
Ita 12
Lux 12
Den 12
Ire12
GB12
Gre12
Spa 12
Por12

46.7))
59.2))
27.0))
28.8)
45.0))
39.7))
17.2))
59.4))
36.5))
61.8))
45.9))
70.1))

2.05))
2.06))
3.59))
5.81))
1.28))
2.84))
3.4))
0.92))
1.82))
0.43
1.35
0.33

0.75
0.47
0.72
0.52
0.73
0.35
0.84
0.53
0.84
0.14
0.16
0.13

0.9))
0.6))
0.6))
0.3))
1.0)
0.5))
1.2
0.7))
1.9
1.8
1.4
1.0

)Rejection of the null hypothesis at the 5% significance level.

))Rejection of the null hypothesis at the 1% significance level.

B. Hayo r European Journal of Political Economy 14 (1998) 241263

254

The finding that all of the slope coefficients are positive could also be regarded
as in accord with the often-found quadratic specification of the public objective
function within the framework of the orthodox view e.g., Barro and Gordon, 1983
or Cukierman, 1992.. The implication is that a societys aversion to inflation rises
with the inflation rate. However, typically preferences are assumed to be given in
these models andas has been outlined abovethis cannot be considered a
satisfactory explanation for the existence of differing inflation rates and the
creation of independent central banks across countries.
To analyse the robustness of the estimates, diagnostic tests were performed,
namely the DurbinWatson test DW., an LM-test for autocorrelation of first and
second order, an LM-Test for ARCH, a test for normality, the White-test for
heteroskedasticity, and the RESET-test. The DW test statistics are given in the
table, while most of the other tests, which do not indicate a serious problem, have
been omitted. However, the DW statistics point at first-order autocorrelation for a
number of regressions, which, even if OLS continues to be unbiased, invalidates
the tests of significance.
To account for that problem, the same regressions were reestimated allowing
for an autoregressive error term RALS.. The error term in Eqs. 1a. and 1b. is
now assumed to be of the form u1it s d 1 u1it 1 q 1t and u12it s d 12 u12it 1 q 12t ,
with 1t and 12t being white-noise errors. The results are displayed in Table 5. It
is clear that the estimates with low DW-statistics in the OLS-regression have a
significant autoregressive error term. Substantial changes in the slope parameter
estimates can be found, especially for Belgium and Luxembourg and in the
intercept for Belgium and Denmark. In general, the RALS-estimators of the

Table 5
RALS-regression of first priority on inflation and first and second priority on inflation 19761993,
Greece 19851993., Spain and Portugal 19841993..
State a 1
Fra 1
Bel 1
Net 1
Ger1
Ita 1
Lux 1
Den 1
Ire1
GB1
Gre1
Spa 1
Por1

b1

d1

Pseudo R 2 State a 12

19.2)) 1.49)) 0.52) 0.83

y8.8
0.41
0.98)) 0.78
9.3)) 1.3)
0.70)) 0.81
5.04
1.57)
0.90)) 0.89
16.3)) 0.59)) 0.20
0.67
11.9
0.16
0.84)) 0.79
5.0)) 1.27)) 0.23
0.84
27.8)) 0.33
0.78)) 0.61
11.4)) 1.53)) 0.13
0.85
27.5)) 0.21
y0.19
0.04
20.3)) y0.11
y0.35
0.14
27.6)
0.55
0.84) 0.72

b12

d12

Pseudo R 2

Fra 12
47.4)) 1.80)) 0.46) 0.84
Bel 12 y952.2
0.10
0.99)) 0.82
Net 12
21.8
2.05)
0.90) 0.86
Ger12
27.3
2.82)
0.89)) 0.91
Ita 12
47.4)) 0.92)
0.72)) 0.80
Lux 12
32.9
y0.02
0.89)) 0.84
Den 12 y851.8
0.77
0.99)) 0.88
Ire12
45.3
0.24
0.94)) 0.72
GB12
35.9)) 1.93)) y0.04
0.84
Gre12
64.4)) 0.27
0.02
0.06
Spa 12
54.3)) y0.26
0.43
0.22
Por12
73.6)) y0.10
0.55
0.34

)Rejection of the null hypothesis at the 5% significance level.

))Rejection of the null hypothesis at the 1% significance level.

B. Hayo r European Journal of Political Economy 14 (1998) 241263

255

Table 6
SURE-regression of first priority on inflation and first and second priority on inflation 19761993.
State

a 1

b1

State

a 12

b12

Fra 1
Bel 1
Net 1
Ger1
Ita 1
Den 1
Ire1
GB1
log-like
VecAR11.
VecNorm

20.4))
31.4))
8.5))
8.3))
16.2))
4.6))
28.1))
11.9))
y116.02
1.45
19.6

1.51))
1.96))
2.03))
3.4))
0.62))
1.33))
0.74))
1.46))

5.31
5.91
2.82
6.53
2.59
2.12
5.07
2.90

Fra 12
Bel 12
Net 12
Ger12
Ita 12
Den 12
Ire12
GB12
log-like
VecAR11.
VecNorm

48.6))
62.2))
28.3))
29.1))
48.1))
20.4))
62.5))
36.6))
y161.64
1.61
20.9

1.79))
1.43))
3.22))
5.71))
0.99))
2.93))
0.56))
1.81))

5.08
6.05
5.99
9.77
4.99
5.86
6.21
3.99

)Rejection of the null hypothesis at the 5% significance level.

))Rejection of the null hypothesis at the 1% significance level.
s is the standard error of the respective equation, log-like the value of the log-likelihood function for
the system.

sensitivity parameters are lower than their OLS-counterparts. Therefore, the force
of the OLS-results seems to be somewhat reduced but not necessarily contradicted.
We cannot be sure that by using RALS we have treated the cause of the
autocorrelation. Other possible reasons, like omitted variables or a lacking dynamic adjustment, may be important too. Since the sample size is very small, there
is no scope to estimate a dynamic model with any precision. Accordingly,
preliminary tests with first-order lags indicate that in some cases the autocorrelation cannot be fully removed from the residuals.
An analysis using unit-root tests and graphical inspection of the spectrum points
towards possible non-stationarity in the series. Since the sample size is much too
low to distinguish between the processes, no detailed analysis will be presented. 17
Repeating the regressions in Eqs. 1a. and 1b. for the variables in first-differences
leads to similar results as in the RALS-estimation. Only the coefficients for the
Netherlands, Germany, and Great Britain turn out to be significant. One should
note that the interpretation of the regression in differences would entail a reaction
of the change in inflation attitudes caused by a change in actual inflation.
However, Hibbs 1979. on p. 725 presents results showing that the respondents
look at the level of inflation when forming their attitudes, and not at the changes in
the growth rate of prices. The correlations between actual inflation rates and

17

See, for example, the survey by Campbell and Perron 1991. and especially the comments by
Cochrane 1991. and Miron 1991..

256

B. Hayo r European Journal of Political Economy 14 (1998) 241263

estimated parameters from the equations in differences are somewhat higher than
the ones computed for the RALS-regressions given later in Table 7.. 18
Further analysis of the OLS-residuals reveals contemporaneous correlation
among the residuals from the different equations. To enhance the efficiency of the
estimates, the SUR-estimator has been employed see, e.g., p. 363 and following
of Darnell, 1994.. In Table 6, the SUR-estimates for only eight countries are given
to avoid degrees-of-freedom problems. The resulting parameter estimates are
different but still relatively close to the OLS-estimates. While we do not discover
autocorrelation VecAR11.. or non-normality VecNorm. for the vector of
residuals, we find evidence of first-order autocorrelation for all of the single
equations not given in the table., and thus are still confronted with a possible bias
in the variance estimators.

5. Evaluating the results with respect to central bank independence

To summarise the discussion of the previous sections, I will demonstrate how
the estimated indicators relate to the indices of central bank independence used in
the literature. The utilised indicators for central bank independence have been
proposed by the following: Bade, R. and Parkin, M., 1982 in Central Bank Laws
and Monetary Policy unpublished., Grilli et al. 1991. on p. 366, and Alesina and
Summers 1993. on p. 154. As is described by Cukierman 1992. on p. 422, his
index for legal independence is very similar to these indicators. Therefore, we do
not explicitly consider Cukiermans index in the following analysis.
While Bade and Parkin and Alesina and Summers try to construct an overall
indicator of central bank independence, Grilli et al. distinguish between political
and economic independence. Political independence PolIn. is defined as the
autonomy of the central bank to pursue a policy of price stability without being
influenced by the government. Economic independence EcoIn. reflects the ability
of the central bank to select its monetary policy instruments. The index of Alesina
and Summers AleSu. is a combination of Bade and Parkins Bade. and Grilli et
al.s index.
In Table 7, correlation coefficients between the estimated indicators for importance of the inflation goal and the average inflation rates are calculated. As is
usually the case, the Spearman rank correlation estimates are lower than the ones
calculated using Pearsons statistic.
From the table, we can draw the following conclusions.
The central bank indices are negatively correlated with the average inflation
rate. A significant correlation exists only for economic independence.
18

More information about the estimation in differences can be obtained from the author upon
request.

PolIn
EcoIn
Bade
AleSu
OLS1
OLS12
SU1
SU12
RA 1
RA 12
Inflat

PolIn

EcoIn

Bade

AleSu

OLS1

OLS12

SU1

SU12

RA 1

RA 12

Inflat

1
0.01
0.24
0.52
0.18
0.47
0.22
0.44
0.28
0.56
y0.38

0.18
1
0.87))
0.65
0.80))
0.77))
0.68
0.49
0.56
0.41
y0.72)

0.52
0.74)
1
0.90))
0.88))
0.85))
0.80)
0.80)
0.79)
0.71)
y0.52

0.68
0.66
0.96))
1
0.76)
0.95))
0.67
0.95))
0.68
0.69
y0.60

0.48
0.82))
0.91))
0.84))
1
0.78))
0.99))
0.69
0.76))
0.63)
y0.69)

0.72)
0.74))
0.90))
0.98))
0.84))
1
0.83))
0.90))
0.64)
0.64)
y0.91))

0.44
0.78)
0.92))
0.89))
0.99))
0.89))
1
0.74)
0.57
0.55
y0.93))

0.65
0.59
0.91))
0.99))
0.84))
0.99))
0.89))
1
0.79)
0.76)
y0.81)

0.39
0.59
0.65
0.61
0.74))
0.69)
0.53
0.68
1
0.87))
y0.40

0.62)
0.54
0.75)
0.72)
0.77))
0.77))
0.66
0.75)
0.90))
1
y0.37

y0.41
y0.72)
y0.55
y0.62
y0.67)
y0.73)
y0.87))
y0.74)
y0.47
y0.46
1

Pearsons correlation coefficient is given above and Spearmans below the main diagonal.
)Rejection of the null hypothesis at the 5% significance level.
))Rejection of the null hypothesis at the 1% significance level.

B. Hayo r European Journal of Political Economy 14 (1998) 241263

Table 7
Pearsons and Spearmans correlation coefficients between central bank independence and the OLS-estimators OLS1 , OLS12 . for importance of the inflation
goal, the SUR-estimators SU1 , SU12 ., the RALS-estimators RA 1 , RA 12 . and average inflation Inflat.

257

258

B. Hayo r European Journal of Political Economy 14 (1998) 241263

The estimated indicators for the importance of price stability are also
negatively related with the inflation rate. Except for the RALS-estimates of the
sensitivity parameters, all correlations are statistically significant.
The highest correlation coefficient with average inflation is computed for
SURE 12 . 19 Then we have the OLS-estimators and economic independence. The
lowest correlations are found for RALS-estimators and political independence.
The indicators for economic and political independence of the central banks
are positively correlated with the estimated sensitivity parameters. In most cases,
though, this correlation is not significant.
In Section 6, these findings are put into a broader perspective.
It is tempting to include the competing variables together in a regression model
to assess their respective shares in explaining the variation of the inflation
variable. Unfortunately, the number of observations is much too small for meaningful results from a multivariate analysis involving these highly collinear variables.
To summarise the results of such an analysis, most of the central bank indices
are insignificant and often display a positive sign when put together with a
sensitivity estimator in a regression. The coefficients on the sensitivity estimators
are typically more often significant and exhibit a negative sign. This finding does
not hold in the case of the index variable capturing economic independence, which
tends to be as equally important as the sensitivity estimators, as long as an
intercept is included in the model. In a model without an intercept term, the
sensitivity estimators show again higher t-values and the expected negative sign of
the coefficient.
6. Conclusions
We are faced with the problem of observational equivalence, since the empirical results are consistent with both the orthodox and economicculture hypothesis.
However, previous findings for the orthodox hypothesis have only been replicated,
while the evidence in favour of the economicculture hypothesis is new.
As discussed above, the observation of a negative relation between central bank
independence and inflation rates does not imply causality. Moreover, the empirical
results do not exclude different stability cultures in the EC countries as the prime
underlying explanation for observed outcomes. That the sensitivity estimates are
more highly correlated with the inflation rate than the independence indices raises
further doubts about the dominant role given to the independence argument in the
literature.
19
This is due to the fact that only eight countries are included in the SURE-estimate. Computing all
correlations for these countries only brings out the OLS-estimators as having the highest correlation
with average inflation.

B. Hayo r European Journal of Political Economy 14 (1998) 241263

259

Still, we cannot conclude that public opinion is the most important key to
explaining different national inflation records. There may be reverse causation. It
could be the case that the design of the central bank influences peoples assessment of the importance of keeping prices stable. In other words, people could
consider the inflation goal to be of greater importance, if it were demonstrated to
them that the achievement of stable prices is feasible. But this brings us back to
the historical-feedback interpretation sketched above, only with more emphasis on
central bank independence.
As outlined in Section 2, a hypothesis based on publics preferences opens up
two competing interpretations of how central bank independence and preferences
hang together, the preference-instrument and the historical-feedback interpretation.
Statistical causality analysis could help to shed some light on which of the
positions are preferable on empirical grounds. The finding of a two-way causality
between attitudes on inflation and central bank independence would accord with
the feedback-mechanism, while a unidirectional causality from attitudes to the
legal basis of central banks would support the preference-instrument view. Nocausality relations would fit into the orthodox view.
Given the restraints of the data, we cannot meaningfully investigate Grangercausality relationships. We cannot even trust Granger-causality tests between
actual inflation and attitudes, since the test is very weak for small samples and
there are no degrees of freedom left to perform a specification search over
different lag length see, for example, Thornton and Batten, 1985.. On the other
hand, few philosophers would accept Granger-causality as a true representation of
causality anyway cf. Holland, 1986.. Still, with more data at hand, further
investigations along these lines could be interesting.
We can nonetheless try to say something on this issue using a more heuristic
approach. From the results given in Table 7, it can be seen that there sometimes
exists a high positive correlation between the indices for central bank independence and the sensitivity indicators. This suggests that a large amount of variation
is common to both types of variables. If a correlation coefficient between central
bank indices and sensitivity parameters is not that high, for example in the case of
OLS1 and political independence, the correlation between the latter and average
inflation tends to be rather low. A possible explanation for this finding is that
formal and actual independence can drift apart. This could be taken as tentative
evidence that, if the negative association of sensitivity parameters and central bank
indices with average inflation is high, it is likely to be based on common variation
of the two types of variables. This implies that sensitivity parameters and
independence indiceswhen both correlate highly with inflationmay capture
similar influences, pointing towards the position that central bank independence
and public attitudes towards inflation are interconnected. These arguments give
indirect empirical support for the historical-feedback interpretation.
On the issue of EMU, the conclusion from this analysis is that it may not
suffice for price stability to create an independent ECB. Also of importance in

260

B. Hayo r European Journal of Political Economy 14 (1998) 241263

ensuring low inflation in Europe is the inflation culture in the participating

countries. Convergence on the opinion that inflation should be kept downas
suggested by Collins and Giavazzi 1993. would improve the chances of the
ECB performing successfully. An additional question is whether it is sufficient, for
achieving low inflation rates, that a majority of countries have anti-inflationary
cultures, or whether unanimity is required among member states. As Morales and
Padilla 1995. emphasise, if a majority voting procedure in the governing council
of a ECB were adopted, similarity in preferences on monetary policy will foster an
efficient outcome. Therefore, the question of convergence appears to be a fruitful
field for further enquiry.
The historical example of Germany shows that it is possible to create a stability
consensus. Assuming that the historical-feedback interpretation is correct, the
performance of the ECB shortly after the introduction of the common European
currency will have an important influence on public opinion. If people have the
impression that the ECB is managing monetary policy responsibly and successfully, the feedback process can further strengthen a stable monetary environment
in Europe.
Acknowledgements
Thanks to three anonymous referees, Arye L. Hillman, Matthias Wrede, the
participants of the Bamberg Economic Colloquium January 1996., and to the
participants of the annual Money, Macro, and Finance Conference in London
September 1996. for helpful comments. The usual disclaimer applies.
Appendix A
The database is taken from European Communitys Eurobarometers 5, 7, 9, 11,
13, 15, 17, 19, 21, 23, 25, 27, 29, 31, 33, 35, 37, and 39. Countries analysed in
this study are: France, Belgium, the Netherlands, Germany, Italy, Luxembourg,
Denmark, Ireland, Great Britain UK without Northern Ireland., Greece, Spain and
Portugal.
The original questions in the questionnaires are presented below.
There is a lot of talk these days about what OUR COUNTRY.s goals
should be for the next ten or fifteen years. On this card are listed some of the
goals that different people say should be given top priority. Would you
please say which one of them you yourself consider to be most important in
the long-run? And what would be your second choice?
Maintaining order in the country
Giving the people more say in important government decisions
Fighting rising prices

B. Hayo r European Journal of Political Economy 14 (1998) 241263

261

Protecting freedom of speech

Dont know
Table A1. Development of the share in %. of answers in the Inglehart index,
which considers the fight against inflation as the most important goal
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993

Fra 1
46.6
42.9
38.2
39.7
44.0
41.6
29.1
27.9
32.0
27.0
21.3
26.5
27.1
21.8
21.4
22.6
20.5
24.4

Bel 1
45.9
53.7
45.9
46.7
47.3
44.5
46.0
44.8
46.3
46.7
39.2
37.1
39.0
33.9
34.1
29.7
27.5
26.0

Net 1
28.0
22.0
19.3
20.1
24.6
24.4
15.8
14.7
15.2
12.4
11.7
9.8
11.5
8.4
11.8
11.7
11.8
8.9

Ger1
29.9
28.1
29.7
31.6
31.3
29.5
24.9
16.0
16.1
14.6
8.5
12.3
15.1
10.4
11.2
12.6
13.1
13.5

Ita 1
27.4
25.7
26.3
25.2
29.6
28.2
22.5
27.9
25.4
24.7
20.0
23.3
18.9
21.4
20.0
17.8
15.9
14.6

Lux 1
41.1
31.0
28.6
30.7
32.9
29.3
24.8
28.6
24.8
24.1
25.8
18.8
20.5
12.2
13.6
9.9
9.7
9.3

Den 1
17.1
17.1
14.3
20.2
22.4
20.4
16.0
14.5
13.3
13.3
12.2
12.6
9.2
11.3
10.2
6.0
5.4
4.1

Ire 1
42.1
39.1
41.4
35.9
43.6
46.4
34.0
36.3
37.1
32.8
35.7
37.5
34.5
29.8
28.3
25.5
23.5
18.9

GB1
35.4
36.5
30.4
31.8
36.0
33.8
22.9
23.0
19.5
18.3
18.6
14.5
16.4
22.5
21.8
20.0
17.3
14.3

Gre1
y
y
y
y
38.5
37.4
25.8
31.6
32.8
34.4
31.6
29.3
33.6
25.1
28.1
31.8
27.5
39.3

Spa 1
y
y
y
y
y
y
y
y
y
21.7
20.5
17.9
24.7
17.9
20.9
15.0
18.7
21.2

Por1
y
y
y
y
y
y
y
y
y
44.7
39.7
39.5
40.1
42.7
38.7
33.7
32.6
31.6

Table A2. Development of the share in %. of answers in the Inglehart index,

which considers the fight against inflation as the most or second most important
goal
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989

Fra 12
75.7
74.7
66.3
69.8
76.2
72.8
60.4
60.4
63.6
58.7
52.7
55.9
55.1
48.3

Bel 12
72.8
77.3
74.1
72.6
77.1
74.6
73.9
75.6
76.8
74.4
69.6
64.6
67.7
60.5

Net 12
57.9
52.8
46.1
45.8
57.1
53.8
43.4
41.4
42.9
35.3
33.2
31.1
32.0
26.5

Ger12
65.5
66.2
63.2
64.0
65.8
66.5
53.8
42.7
42.9
38.4
29.8
32.3
38.0
32.5

Ita 12
64.6
64.6
64.4
64.7
70.8
72.1
61.2
69.9
65.3
61.1
56.4
57.0
52.1
53.2

Lux 12
75.2
70.7
64.4
58.2
69.0
65.8
55.1
60.9
62.4
55.2
55.1
46.6
44.3
37.7

Den 12
52.3
53.2
48.2
59.2
59.1
50.5
44.3
43.8
45.1
38.0
36.8
36.0
31.6
32.0

Ire12
74.5
73.7
72.5
67.2
78.3
77.9
69.2
71.6
72.1
68.2
70.1
70.7
65.7
61.6

GB12
63.3
67.2
58.9
59.9
69.1
65.4
49.3
49.0
50.3
45.9
45.8
39.4
41.5
48.6

Gre12
y
y
y
y
75.9
76.0
64.1
70.2
71.6
71.7
71.7
70.2
74.0
61.4

Spa 12
y
y
y
y
y
y
y
y
y
61.3
59.5
56.3
60.3
52.0

Por12
y
y
y
y
y
y
y
y
y
76.9
76.0
74.5
76.8
77.5

B. Hayo r European Journal of Political Economy 14 (1998) 241263

262

1990
1991
1992
1993

50.3
51.9
49.0
53.2

61.5
58.4
55.9
54.7

29.5
30.5
29.5
25.9

35.8
38.8
40.2
42.3

49.9
49.0
45.3
43.0

35.2
31.3
32.3
35.5

28.3
19.2
18.4
14.6

59.2
58.1
52.3
50.1

48.7
44.9
44.1
38.2

66.5
66.2
66.8
72.1

53.3
44.6
51.7
52.0

72.4
67.2
70.9
72.3

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