The Federal Reserve May Be Politically ... - Pluto Huji Ac Il

Table 4: Alternative specications: Relationship between the federal funds rate and
Taylor-rule variables, conditional on electoral cycles and the president’s party.
Model 1 Model 2 Model 3 Model 4
(Intercept) 2.724 ∗∗∗ 0.050 3.389 ∗∗∗ 1.184
(0.529) (0.266) (0.737) (2.617)
FFRt−1 0.579 ∗∗∗ 0.827 ∗∗∗ 0.538 ∗∗∗ 0.520 ∗∗∗
(0.073) (0.045) (0.082) (0.083)
Democrat −0.649 0.757 ∗ −1.523 −6.451 †
(0.680) (0.338) (1.142) (3.593)
Election 0.008 0.038 † 0.001 −0.071 †
(0.016) (0.021) (0.019) (0.042)
π 0.236 ∗∗∗ 0.217 ∗∗ 0.227 ∗∗∗ 0.213 ∗∗
(0.064) (0.067) (0.062) (0.071)
Y-gap 0.044 0.221 ∗ −0.052 −0.102
(0.107) (0.102) (0.121) (0.136)
Democrat × Election −0.094 ∗∗ −0.067 † −0.091 † −0.071
(0.034) (0.035) (0.049) (0.045)
Democrat × π −0.460 ∗ −0.181 −0.431 ∗ −0.549 ∗
(0.199) (0.127) (0.184) (0.220)
Election × π −0.016 ∗∗∗ −0.012 ∗ −0.017 ∗∗∗ −0.014 ∗∗
(0.005) (0.005) (0.005) (0.005)
Democrat × Y-gap 0.251 † −0.151 0.397 ∗ 0.356 ∗
(0.133) (0.121) (0.163) (0.162)
Election × Y-gap 0.026 ∗ −0.006 0.038 ∗∗ 0.047 ∗∗
(0.012) (0.009) (0.014) (0.017)
Democrat × Election × π 0.056 ∗∗∗ 0.021 0.056 ∗∗ 0.065 ∗∗∗
(0.017) (0.015) (0.018) (0.018)
Democrat × Election × Y-gap −0.032 ∗ 0.008 −0.043 ∗ −0.041 ∗
(0.016) (0.014) (0.018) (0.019)
Debt / GDP 0.752
(0.531)
Expenditures / GDP 2.751
(24.057)
N 225 225 225 179
R 2 0.963 0.949 0.965 0.960
adj. R 2 0.958 0.945 0.960 0.954
Resid. sd 0.695 0.797 0.684 0.749
Robust standard errors in parentheses. Administration and chairman dummies omitted.
† signicant at p < .10; ∗ p < .05; ∗∗ p < .01; ∗∗∗ p < .001
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