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The Political Economy of Financial Markets

Type of publication Peer-reviewed
Publikationsform Review article (peer-reviewed)
Author Ferrara Federico Maria, SattlerThomas,
Project Contingent signals: The political preconditions for successful economic stabilisation
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Review article (peer-reviewed)

Journal Oxford Research Encyclopedia in Politics
Page(s) 1 - 32
Title of proceedings Oxford Research Encyclopedia in Politics

Open Access

Type of Open Access Repository (Green Open Access)


The relationship between politics and financial markets is central for many, if not most, political economy arguments. The existing literature focuses on the effect of domestic and international political interests, institutions, and policy decisions on returns and volatility in stock, bond, and foreign exchange markets. This research bears implications for three major debates in political science: the distributive effects of politics, globalization and state autonomy, and the political roots of economic credibility and its tensions with democratic accountability. While the study of politics and financial markets is complicated by several theoretical and empirical challenges, recent methodological innovations in political research provide a window of opportunity for the development of the field.