Signaling in Political Cycles. How far are you willing to go?

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Signaling in Political Cycles. How far are you willing to go?

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Jorge M. Streb

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Jorge Miguel Streb

Abstract

Previous results on political cycles as a signal of competency assumed that opportunism was common knowledge. If opportunism is not common knowledge, there may be a partially pooling equilibrium where cycles indicate opportunism rather than competency. Insofar as more discretionality increases the asymmetry of information, the possibility of cycles increases, and elections may become less effective to select competent incumbents.

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Paper provided by Universidad del CEMA in its series CEMA Working Papers: Serie Documentos de Trabajo. with number 193.

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Date of creation: Jul 2001
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Handle: RePEc:cem:doctra:193

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D7 - Microeconomics - - Analysis of Collective Decision-Making
E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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Other versions:
- Persson, T. & Tabellini, G., 1997. "Political Economics and Macroeconomic Policy," Papers 630, Stockholm - International Economic Studies.
- Torsten Persson & Guido Tabellini, . "Political Economics and Macroeconomic Policy," Working Papers 121, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University. [Downloadable!]
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Other versions:
- 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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Other versions:
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Other versions:
- Stein, Ernesto H. & Streb, Jorge M., 2004. "Elections and the timing of devaluations," Journal of International Economics, Elsevier, vol. 63(1), pages 119-145, May. [Downloadable!] (restricted)
Spence, A Michael, 1973. "Job Market Signaling," The Quarterly Journal of Economics, MIT Press, vol. 87(3), pages 355-74, August. [Downloadable!] (restricted)

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