Cultural differences in monetary policy preferences

An interesting paper by Prof. Adriel Jost of Univ of St Gallen and Swiss National Bank.

The monetary policy preferences of a population are often explained by the country’s economic history. Based on Swiss data, this paper indicates that while different language groups may share the economic history, they demonstrate distinct monetary policy preferences. This suggests that distinct monetary policy preferences among the populations of different countries may be determined by not only their economic histories but also their distinct cultural background.

The author tries to figure the differences using several tests and datasets. For instance:

Given the large differences between inflation aversion in Germany and that in France, one might expect similar differences in the preferences among inhabitants in the German-speaking and French-speaking parts. The survey results indicated that the differences within Switzerland
were smaller. While 36% of the German speakers preferred lower inflation over lower unemployment, 30% of the Latin-language speakers preferred low inflation. This comparably small difference is in line with the results of Bachmann & Hens (2016). They demonstrated greater similarities in the investment-decision behaviour of Swiss with different linguistic backgrounds than between Swiss and their linguistically closest neighbours abroad. 

A similar paper on India would be interesting. Which region’s people are more inflation averse compared to others?

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