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The Political Economics Side of the J-Curve

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  • António Caleiro

    ()
    (Department of Economics, University of Évora)

Abstract

About twenty years ago, an article by van der Ploeg analysed the implications of the J-curve effect for the political business cycle in a small open economy [van der Ploeg (1989c)]. It was then shown that a sudden jump on the exchange rates in the election day should be observed if the government, in order to maximise its popularity, explores a J-curve effect. As a way of celebrating this work, that should have been more influential, it is presented in the paper a simulation study, which confirms that exchange rate overvaluation result a la van der Ploeg.

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File URL: http://hdl.handle.net/10174/8454
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Bibliographic Info

Paper provided by University of Évora, Department of Economics (Portugal) in its series Economics Working Papers with number 02_2008.

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Length: 17 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:evo:wpecon:02_2008

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Keywords: Exchange rates; J-Curve; Partisan Business Cycles; Political Business;

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