The Political Economics Side of the J-Curve
AbstractAbout 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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Bibliographic InfoPaper provided by University of Évora, Department of Economics (Portugal) in its series Economics Working Papers with number 02_2008.
Length: 17 pages
Date of creation: 2008
Date of revision:
Exchange rates; J-Curve; Partisan Business Cycles; Political Business;
Other versions of this item:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F31 - International Economics - - International Finance - - - Foreign Exchange
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-07-05 (All new papers)
- NEP-CBA-2008-07-05 (Central Banking)
- NEP-HPE-2008-07-05 (History & Philosophy of Economics)
- NEP-IFN-2008-07-05 (International Finance)
- NEP-MAC-2008-07-05 (Macroeconomics)
- NEP-POL-2008-07-05 (Positive Political Economics)
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