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Do Financial Markets Respond to Populist Rhetoric?

ÇAKMAKLI, CEM; DEMİRALP, SELVA; GÜNEŞ, GÖKHAN ŞAHİN

Authors

SELVA DEMİRALP

GÖKHAN ŞAHİN GÜNEŞ



Abstract

With the global rise in populism over the last decade, there has been an increase in political commentaries (PC) by leaders that criticize their central banks and argue for lower interest rates. We analyse the effects of PCs on exchange rates, bond yields, and the risk premium for six countries that are subject to political pressures. Utilizing a specification with time-varying parameters, we show that PCs affect the level and the volatility of exchange rates, bond yields and the risk premium in Turkey. The response increases over time. In other countries, there is a significant impact on exchange rate volatility.

Citation

ÇAKMAKLI, C., DEMİRALP, S., & GÜNEŞ, G. Ş. (2024). Do Financial Markets Respond to Populist Rhetoric?. Oxford Bulletin of Economics and Statistics, 86(3), 541-567. https://doi.org/10.1111/obes.12591

Journal Article Type Article
Acceptance Date Nov 23, 2023
Online Publication Date Dec 29, 2023
Publication Date 2024-06
Deposit Date Jan 8, 2024
Publicly Available Date Dec 30, 2025
Journal Oxford Bulletin of Economics and Statistics
Print ISSN 0305-9049
Electronic ISSN 1468-0084
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 86
Issue 3
Pages 541-567
DOI https://doi.org/10.1111/obes.12591
Keywords Statistics, Probability and Uncertainty; Economics and Econometrics; Social Sciences (miscellaneous); Statistics and Probability
Public URL https://durham-repository.worktribe.com/output/2078111

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This file is under embargo until Dec 30, 2025 due to copyright restrictions.





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