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Taxation and political business cycles in EU economies

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Author Info
Andreas Andrikopoulos
Ioannis Loizides
Kyprianos Prodromidis

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Abstract

This paper examines whether incumbent national governments of 11 member states of the European Union manipulated the tax policy instruments at their disposal in order to create national political business cycles, opportunistic or partisan. The empirical evidence, based on data concerning the 1965 to 1997 period, does not support this hypothesis. Rather, it appears that governments have pursued stabilization policies.

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Article provided by Taylor and Francis Journals in its journal Applied Economics.

Volume (Year): 38 (2006)
Issue (Month): 15 (August)
Pages: 1761-1774
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Handle: RePEc:taf:applec:v:38:y:2006:i:15:p:1761-1774

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  1. Ravn, Morten O. & Uhlig, Harald, 2001. "On Adjusting the HP-Filter for the Frequency of Observations," CEPR Discussion Papers 2858, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. de Haan, Jakob & Sturm, Jan-Egbert, 1997. "Political and economic determinants of OECD budget deficits and government expenditures: A reinvestigation," European Journal of Political Economy, Elsevier, vol. 13(4), pages 739-750, December. [Downloadable!] (restricted)
  3. Alesina, Alberto & Cohen, Gerald D. & Roubini, Nouriel, 1993. "Electoral business cycle in industrial democracies," European Journal of Political Economy, Elsevier, vol. 9(1), pages 1-23, March. [Downloadable!] (restricted)
  4. Frey, Bruno S & Schneider, Friedrich, 1978. "An Empirical Study of Politico-Economic Interaction in the United States," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 174-83, May. [Downloadable!] (restricted)
  5. Kenneth Rogoff, 1990. "Equilibrium Political Budget Cycles," NBER Working Papers 2428, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  6. repec:fth:coluec:754 is not listed on IDEAS
  7. Alesina, Alberto, 1987. "Macroeconomic Policy in a Two-Party System as a Repeated Game," The Quarterly Journal of Economics, MIT Press, vol. 102(3), pages 651-78, August. [Downloadable!] (restricted)
  8. Timothy Cogley & James M. Nason, 1993. "Effects of the Hodrick-Prescott filter on trend and difference stationary time series: implications for business cycle research," Working Papers in Applied Economic Theory 93-01, Federal Reserve Bank of San Francisco.
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  9. Rogoff, Kenneth & Sibert, Anne, 1988. "Elections and Macroeconomic Policy Cycles," Review of Economic Studies, Blackwell Publishing, vol. 55(1), pages 1-16, January. [Downloadable!] (restricted)
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  10. Alberto Alesina & Nouriel Roubini, 1990. "Political Cycles in OECD Economies," NBER Working Papers 3478, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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