Rhetoric and Action: What are Central Banks Doing Before Elections?

Central bank rhetoric need not always be followed bycorresponding measures. In a number of regressions coveringGermany, Japan and the U.S. we examine differences in rhetoricand actual behavior before elections, using a standard PBCmodel. Our results indicate that these three central bankshave not been influenced by electoral consideration in thepolicies they implement, but the case of the German Bundesbankindicates that it may be helpful to distinguish betweenrhetoric and action.