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Economics and politics in the United States: a state-level investigation

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  • Chun-Ping Chang
  • Yoonbai Kim
  • Yung-hsiang Ying

Abstract

We examine state income and government spending data to investigate the role of political parties and elections in state business cycles of the United States, and find strong support for the partisan political business cycles, both traditional and rational versions. The growth rate of per capita real income and government spending tend to be higher (lower) with a Democratic (Republican) governor as well as a Democratic (Republican) president. In case of economic growth, we find some evidence for opportunistic cycles induced by national level politics; meanwhile, both national and state governments seem to generate expansionary policy in election years.

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Bibliographic Info

Article provided by Taylor and Francis Journals in its journal Journal of Economic Policy Reform.

Volume (Year): 12 (2009)
Issue (Month): 4 ()
Pages: 343-354

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Handle: RePEc:taf:jecprf:v:12:y:2009:i:4:p:343-354

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Related research

Keywords: political business cycle; state level;

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Cited by:
  1. Christian Bjørnskov & Niklas Potrafke, 2013. "The size and scope of government in the US states:Does party ideology matter?," Ifo Working Paper Series Ifo Working Paper No. 162, Ifo Institute for Economic Research at the University of Munich.
  2. Niklas Potrafke & Margret Schneider & Christian Simon, 2013. "Zum Einfluss von Parteiideologie auf die Staatstätigkeit in den US-Bundesstaaten," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 66(11), pages 24-29, 06.
  3. Christian Bjørnskov & Niklas Potrafke, 2009. "Political ideology and economic freedom across Canadian provinces," Working Papers CEB 09-054.RS, ULB -- Universite Libre de Bruxelles.

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