The Political Business Cycles of EU Accession Countries
AbstractThis paper considers whether political business cycles exist in Eastern European accession countries.Section I introduces the overall objectives of the work. Section II provides a short introductionto the political business cycle literature. It also considers the role of exchange rates, capitalmobility, and central bank independence in restricting or encouraging political business cycles.Section III lays out the accession process to date as well as the exchange rate regimes accessionstates have used. Section IV tests empirically whether there have been political business cyclesduring the time period 1990 to 1999 for the 10 Eastern European accession countries, with estimationsbased on a Mundell-Fleming model. It finds that countries with flexible exchange rates have loosermonetary policies in election years than in non-election years in countries with dependent centralbanks. If a country has a fixed exchange rate regime, it manipulates its economy in election yearsthrough running larger budgets instead of through looser monetary policy. Section V concludes withsome policy implications for the European Union's enlargement process and EMU.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 00-085/2.
Date of creation: 23 Oct 2000
Date of revision:
Contact details of provider:
Web page: http://www.tinbergen.nl
This paper has been announced in the following NEP Reports:
- NEP-CBA-2000-11-13 (Central Banking)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tamim Bayoumi and Barry Eichengreen., 1992.
"Shocking Aspects of European Monetary Unification,"
Economics Working Papers
92-187, University of California at Berkeley.
- Bayoumi, Tamim & Eichengreen, Barry, 1992. "Shocking Aspects of European Monetary Unification," CEPR Discussion Papers 643, C.E.P.R. Discussion Papers.
- Tamim Bayoumi & Barry Eichengreen, 1992. "Shocking Aspects of European Monetary Unification," NBER Working Papers 3949, National Bureau of Economic Research, Inc.
- Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR & CES & MSH, vol. 12(24), pages 125-176, 04.
- Eichengreen, Barry, 1993. "European Monetary Unification," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1321-57, September.
- Georgios Efthyvoulou, 2012.
"Political budget cycles in the European Union and the impact of political pressures,"
Springer, vol. 153(3), pages 295-327, December.
- Georgios Efthyvoulou, 2010. "Political Budget Cycles in the European Union and the Impact of Political Pressures: A dynamic panel regression analysis," Birkbeck Working Papers in Economics and Finance 1002, Birkbeck, Department of Economics, Mathematics & Statistics.
- Jula, Dorin, 2008. "Economic Impact of Political Cycles – The Relevance of European experinces for Romania," Working Papers of Institute for Economic Forecasting 081101, Institute for Economic Forecasting.
- Troeger, Vera & Schneider, Christina J., 2012. "Strategic Budgeteering and Debt Allocation," CAGE Online Working Paper Series 84, Competitive Advantage in the Global Economy (CAGE).
- Christian Fahrholz, 2003. "Strategic Exchange-Rate Policy of Accession Countries in ERM II," Eastward Enlargement of the Euro-zone Working Papers wp14, Free University Berlin, Jean Monnet Centre of Excellence, revised 01 Apr 2003.
- Eichengreen, Barry, 2003. "The Accession Economiesâ€™ Rocky Road to the Euro," Institute of European Studies, Working Paper Series qt07h5c51w, Institute of European Studies, UC Berkeley.
- Rafal Benecki & Jens Hölscher & Mariusz Jarmuzek, 2006.
"Fiscal Transparency and Policy Rules in Poland,"
CASE Network Studies and Analyses
0327, CASE-Center for Social and Economic Research.
- Alt, James E. & Lassen, David Dreyer, 2006. "Fiscal transparency, political parties, and debt in OECD countries," European Economic Review, Elsevier, vol. 50(6), pages 1403-1439, August.
- Lucio Vinhas de Souza, 2002. "Integrated monetary and exchange rate frameworks: are there empirical differences?," Bank of Estonia Working Papers 2002-2, Bank of Estonia, revised 12 Oct 2002.
- Mehari Mekonnen Akalu, 2002. "Measuring and Ranking Value Drivers," Tinbergen Institute Discussion Papers 02-043/2, Tinbergen Institute.
- Marko Klašnja, 2008. "Electoral Rules, Forms of Government, and Political Budget Cycles in Transition Countries," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 55(2), pages 185-218, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Antoine Maartens (+31 626 - 160 892)).
If references are entirely missing, you can add them using this form.