Partisan Bias in Inflation Expectations

How does partisanship affect inflation expectations? While most research focuses on how inflation impacts political approval and voter behavior, we analyze the political roots of inflation expectations. We argue that elections serve as key moments when citizens update their economic outlook based on anticipated policy changes, and that partisanship influences these re-evaluations. Using a two-wave panel survey conducted before and after the 2024 U.S. Presidential Election, we show that partisan alignment strongly shapes inflation expectations. Democrats reported heightened inflation expectations, anticipating inflationary policies under a Trump administration, while Republicans expected inflation to fall. These shifts reflect partisan interpretations of economic policy rather than objective forecasts. We also analyze the characteristics of those who are more likely to update inflation expectations and in what direction. Importantly, we verify that individuals with strong partisan attitudes exhibit less anchored inflation expectations. Our findings have implications beyond the case under analysis. From a policy perspective, our results underscore the challenges central banks face in anchoring inflation expectations in an era of political polarization, where economic perceptions differ sharply across partisanship lines

Information, Party Politics, and Public Support for Central Bank Independence

Why do citizens support central bank independence (CBI)? Despite important research on economic and political reasons to grant independence to central banks, we know little about what the public thinks about CBI. This is important given citizens' potential role in constraining politicians' ability to alter CBI. We hypothesize that support for CBI is influenced by citizens' limited understanding of central bank governance and their beliefs about who will gain control over monetary policy if independence is reduced. Our expectations are confirmed by a preregistered survey experiment and a pre-post-election test in the U.S. Support for CBI increases when respondents learn that the President would gain more influence if independence was reduced. This support decreases when respondents expect a co-partisan to lead the executive branch. These findings shed light on the legitimacy basis of monetary institutions in politically polarized contexts and, from a policy perspective, indicate the limits of central bank communication

Ethnic politics and sovereign credit risk

How does domestic politics affect sovereign credit risk? To date, scholars have largely focused on how economic interests along class-cleavages influence sovereign default risk and borrowing costs. Ethnic dynamics are another important political factor that explains governments’ creditworthiness, yet are understudied. We investigate how ethnic politics shape governments’ credit access and argue that the fiscal incentives generated by ethnic coalitions influence credit risk differently than those created by class cleavages. Because ethnic coalitions are usually smaller than class coalitions, left governments with ethnic support can commit to lower spending and receive more favorable risk assessments. Right governments that rely on ethnic support, however, will have greater spending demands because of their need to satisfy ethnic groups. We test our argument using a new indicator of government ethnic support and four indicators of sovereign credit risk. We find that, in emerging markets, the borrowing costs of right governments increase as they become more dependent on ethnic groups for political support. Our findings suggest that financial markets are attuned to multiple dimensions of domestic politics and demonstrate that ethnic divisions can have strong implications for governments’ access to credit

Professionalization and Effectiveness in State Legislatures

The 84th regular session of the Texas Legislature will convene in Austin on January 13, 2015, and is scheduled to run through June 1, 2015. Students in this capstone will spend the fall semester learning about state legislatures in general and the Texas Legislature in particular. During the spring semester, students will relocate to Austin to work for state legislators, legislative committees, or legislative agencies. The specific legislators and committees have not been finalized as yet, but students can expect to have opportunities to use their analytic skills. Even though students will have different work assignments during the spring semester, we will come together as a capstone class regularly. Students will produce a capstone report that builds on their fall semester study and their spring semester work experiences. The actual substance of the report will be determined by the capstone class; but it could address session milestones (significant legislation adopted/defeated/deferred); noteworthy shifts in policy (e.g., redistricting in the 82nd session, the rainy day fund in the 83rd session); or, possibly, a comparison of Texas legislative actions to those in other states as well as the identification and discussion of issues on the horizon for the 85th session

Replication Data for: Threats and the Public Constraint on Military Spending

This data and code allows one to replicate all the analysis in the paper and supplementary appendix

Crisis and Debt Consolidation Delay in Brazil

This study seeks to examine how moving the date of an expected crisis influences citizens' willingness to support costly debt consolidation policies. The idea is motivated by work that suggests that individuals are myopic and are willing to delay investment in costly public policies

The Wealth Effect and Future Oriented Policies

Experimental research shows that individuals demonstrate greater patience and less discounting behavior, in the context of individual welfare, when they are placed in situations of abundance compared to situations of scarcity. In this study, I examine if this phenomenon extends to support for future-oriented public policies. Many important international problems faced by governments, like climate change, require citizens to make inter-temporal trade-offs; incurring contemporary costs for future collective returns. Yet we have a limited understanding of the factors that drive support for these policies. To gain traction on this important question, I use a treatment inspired by the ``wealth effect'' to examine if individuals are more likely to support future-oriented policies when they perceive greater individual wealth. The wealth effect states that individuals perceive they have greater income when the perceived value of their illiquid assets (property or retirement funds) increases despite the fact that their disposable income has not increased. To induce the wealth effect, I randomly expose respondents to online estimates of their home value. I expect that individuals that update their beliefs about their wealth are more likely to support future-oriented policies and that this effect is conditional on the local housing market, respondents' naivety of the housing market, and strong partisanship

Replication data for: The Physical Consequences of Fiscal Flexibility: Sovereign Credit and Physical Integrity Rights

Replication data and supplementary appendix for "The Physical Consequences of Fiscal Flexibility:Sovereign Credit and Physical Integrity Rights