Political Cycles, Fiscal Deficits, and Output Spillovers in Europe
AbstractThis paper investigates whether national elections in Europe generate political cycles in other European countries, and, if so, whether these spillover effects are likely to survive inside EMU. The paper first tests whether elections in Germany affect macroeconomic outcomes in other European countries and then investigates the impact of elections on budget deficits. The results indicate that German politics significantly impacts macroeconomic variables in other European countries, and also that politics significantly affects the behaviour of European budgetary policy. The prospect of elections tends to increase public deficits in recessions, whereas left-wing governments tend to be more deficit-prone than right-wing governments regardless of the state of the economy. Moreover, the existence of political cycles spillovers among European countries suggest that there may be a need for electoral coordination. Copyright 2002 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 111 (2002)
Issue (Month): 1-2 (March)
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Web page: http://www.springerlink.com/link.asp?id=100332
Other versions of this item:
- André Sapir & Khalid Sekkat, 2002. "Political cycles, fiscal deficits and output spillovers in Europe," ULB Institutional Repository 2013/7346, ULB -- Universite Libre de Bruxelles.
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- J. Stephen Ferris & Stanley L. Winer, 2006. "Politics, political competition and the political budget cycle in Canada, 1870 - 2000: a search across alternative fiscal instruments," Carleton Economic Papers 06-05, Carleton University, Department of Economics.
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