Meet the Producer: Economic Shocks, Exchange Rate Regimes, and the Politics of Economic Networks
32 Pages Posted: 13 Aug 2009 Last revised: 4 Sep 2009
Date Written: 2009
Abstract
In the last fifteen years, considerable efforts have been conducted to understand how currency shocks affect the political importance of economic actors and their coalition building strategies. Most models of trade and coalitions, concern themselves with showing how policy changes affect the relative income of economic actors. Under the working assumption that income equates power, most of these models assume that policy changes in the area of trade will also result in changes in the political hierarchy of economic actors. In this article we put this proposition to the test, using a novel empirical design that measures the level of centrality of over a 120 economic actors and economic organizations over a critical period of exchange rate regime change in Argentina. Using a computer guided technique to retrieve monthly dyads revealing information about the proximity of economic groups and government figures from over a 55,000 news articles, we show the effect of policy changes on economic networks. Results provide clear evidence of the newly acquired political importance of key beneficiaries of the new trade regime.
Keywords: trade, coalitions, exchange rates
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