Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 2, 2023 erstellt
Description:
Monetary policies of the United States have increasingly become more proactive and substantive. Existing scholarship finds that US monetary policies have had clear economic spillover effects on financial markets across borders, given the dollar’s central position in the international monetary system. We argue that the US monetary policies also instigate political spillovers to economies that are more dependent on the global capital market. Support for political regimes often depends on the economic performance of the incumbent regime, especially for autocracies, as existing studies have shown. Hence, negative spillovers from monetary policies of core economies can also influence the internal politics of peripheral economies. By focusing on annual deviations of the US Federal Reserve’s balance sheet volume and their relationship to support for incumbent regimes, we find that increased volatility in the Federal Reserve’s balance sheets significantly decreases support for the incumbent political regime in autocracies with higher financial dependence on the global capital market, but does not meaningfully influence regime support in democracies with even higher financial dependence. We explain this varied impact by conducting a series of mechanism tests on the influence of the Federal Reserve’s balance sheet volatility on multiple economic parameters