Journal ArticleDOI
The Price of Popularity: The Political Business Cycle Reexamined
David G. Golden,James M. Poterba +1 more
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This paper examined the validity of the political business cycle theory as a description of the macroeconomic policy process in the United States and found that the stimulus needed to produce even small popularity gains is substantial.Abstract:
This paper examines the validity of the political business cycle theory as a description of the macroeconomic policy process in the United States. It considers the ability of incumbent presidents to enhance their approval ratings by manipulating monetary and fiscal tools. The first section estimates the potential political gains from economic expansion and finds that the stimulus needed to produce even small popularity gains is substantial. The second section examines the extent to which government economic policy has been influenced by the political environment. Reaction functions for various policy instruments are estimated, and the results are shown to cast substantial doubt on the importance of the political business cycle hypothesis as an explanation of macroeconomic policy.read more
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Equilibrium Political Budget Cycles
Kenneth Rogoff,Kenneth Rogoff +1 more
TL;DR: In this paper, the authors provide a fully-specified equilibrium framework for analyzing a number of proposals for mitigating electoral cycles in fiscal policy, in which a political budget cycle arises via a multidimensional signaling process.
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Elections and Macroeconomic Policy Cycles
Kenneth Rogoff,Anne Sibert +1 more
TL;DR: In this paper, the authors show that electoral cycles in taxes, government spending and money growth can be modeled as an equilibrium signaling process, driven by temporary information asymmetries which can arise if, for example, the government has more current information on its performance in providing for national defence.
Journal ArticleDOI
Economic Determinants of Electoral Outcomes
TL;DR: The authors found that voters hold the government responsible for economic performance, rewarding or punishing it at the ballot box, regardless of the democracy they vote in, and that good times keep parties in office, bad times cast them out.
Journal ArticleDOI
Macroeconomic Policy in a Two-Party System as a Repeated Game
TL;DR: In this article, the authors consider the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward-looking wage-setters and show that if discretionary policies are followed, an economic cycle related to the political cycle results in equilibrium.
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Political Parties and the Business Cycle in the United States, 1948-1984
TL;DR: In this paper, the existence and the extent of a politically induced business cycle in the U.S. in the post-World War II period was analyzed. But the model described in this paper is different from the traditional "political business cycle" of Nordhaus.
References
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Book
An Economic Theory of Democracy
TL;DR: Downs presents a rational calculus of voting that has inspired much of the later work on voting and turnout as discussed by the authors, particularly significant was his conclusion that a rational voter should almost never bother to vote.
Journal ArticleDOI
Short-Term Fluctuations in U.S. Voting Behavior, 1896–1964
TL;DR: This paper developed several simple multivariate statistical models and applied them to explain fluctuations in the aggregate vote for the United States House of Representatives, over the period 1896-1964, and found that voters are rational in at least the limited sense that their decisions as to whether to vote for an incumbent administration depend on whether its performance has been "satisfactory" according to some simple standard.
Book
Political Control of the Economy
TL;DR: Tufte, a political scientist who covered the 1976 U.S. presidential election for "Newsweek" as mentioned in this paper, provided an eyeopening view of the impact of political life on the national economy of America and other capitalist democracies.
Book
War, presidents, and public opinion
TL;DR: The authors presents a rigorous analysis of public opinion on the wars in Korea and Vietnam, and on the Presidents who led us during those conflicts, showing how polling results are often misused, and develops many unconventional conclusions.