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²² Karl Otto Pohl in 1992; see Marsh (fn. 13), chap. 8.

²³ Primary sources on the debate are collected in Bundesbank, Deutsche, Dreifiigjahre Deutsche Bun desbank: Die Entstebung des Bundesbankgesetzes vol 26. Juli 1957 (Thirty years Deutsche The genesis of the Bundesbank Law of July 26, 1957 (Frankfurt am Main: Deutsche Bundesbank, 1988Google Scholar).

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³⁰ Here I Mo w Lang and Welzel (fn. 6).

³¹ I use 115 observations and not the 120 that might be expected for quarterly data covering the time period 1960–89. This is because of the loss of the first five observations that occurs when lagged fourth-quarter-to-fourth-quarter growth rates are formed.

³² Consider the model y_t = α + βy_t-1 + ε_t, where y is the dependent variable, α is a constant, β is the coefficient on the lagged dependent variable, and ε is a spherical disturbance. The bias of the OLS estimator of β, β^OLS, is given by , where T is the number of observations. Note that the bias becomes small as T becomes large. (Moreover, the presence of additional regressors in the model decreases the bias.) One possible correction for the bias is to use the estimator see Peter Kennedy, A Guide to Econometrics, 2d ed. (Cambridge: MIT Press, 1985), 122. The regression results summarized in Tables 6 and 7 show that my qualitative conclusions are unaffected by the bias, noting that T equals 115.

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³⁴ Ibid; and see also Ben Bernanke and Frederic Mishkin, “Central Bank Behavior and the Strategy of Monetary Policy: Observations from Six Industrialized Countries,” in Blanchard, Olivier J. and Fischer, Stanley, eds., NBER Macroeconomics Annual 1992 (Cambridge: MIT Press, 1992Google Scholar); Neumann, Manfred J. M. and von Hagen, Jurgen, “Germany,” in Fratianni, Michelle U. and Salvatore, Dominick, eds., Monetary Policy in Developed Economies: Handbook of Comparative Economic Policies, vol. 3 Conn.: Greenwood Press, 1993Google Scholar).

³⁵ This specification of the preelection dummy variable is standard in the empirical literature on political business cycles. Given that money affects employment and output with a lag of several quarters, this specification is not, strictly speaking, consistent with the idea that preelection monetary surges are meant to stimulate the economy and thereby increase the government's reelection prospects. I conjecture that increases in the money supply prior to elections reflect electorally motivated decreases in “visible” interest rates. This variant on the Nordhaus hypothesis is more plausible empirically, but it remains to be developed theoretically. For further discussion, see Lohmann (fh. 16,1997).

³⁶ Berger and Woitek (fh. 6,1997) also test and reject the Vaubel hypothesis.

³⁷ Frey and Schneider (fn. 6); see also Schultz, Kenneth A., “The Politics of the Political Business Cycle,” BritishJournal ofPolitical Science 25 (January 1995Google Scholar).

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⁴⁶ Caesar (fh. 27).

⁴⁷ Posen (fn. 45, 1993, 1995); see also Henning, C. Randall, Currencies and Politics in the United States, Germany, and Japan (Washington, D.C.: Institute for International Economics, 1994Google Scholar).

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