Elections and Macroeconomic Policy Cycles / Kenneth Rogoff, Anne Sibert.

Format:

Book

Author/Creator:

Rogoff, Kenneth.

Contributor:

Sibert, Anne.

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1838.

NBER working paper series no. w1838

Language:

English

Subjects (All):

Elections--Economic aspects.

Elections.

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1986.

[Washington, D.C.] : [Board of Governors of the Federal Reserve System], [1985]

Summary:

There is an extensive empirical literature on political business cycles, but its theoretical foundations are grounded in pre-rational expectations macroeconomic theory. Here we show that electoral cycles in taxes, government spending and money growth can be modeled as an equilibrium signaling process. The cycleis driven by temporary information asymmetries which can arise if, for example,the government has more current information on its performance in providing for national defense. Incumbents cheat least when their private informationis either extremely favorable or extremely unfavorable. An exogenous increase in the incumbent partyts popularity does not necessarily imply a damped policy cycle.

Notes:

February 1986.

Includes bibliographical references (pages 35-36).

Print version record

OCLC:

696173860