Assigning Economic Policy and Business Cycle Shocks to Democrats and Republicans: A Common Trends Approach

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Assigning Economic Policy and Business Cycle Shocks to Democrats and Republicans: A Common Trends Approach

Author Info

Hjelm, Göran () (Department of Economics, Lund University)

Abstract

We estimate a so called common trends model of federal taxes and spending in the U.S.. Using dates on presidential terms as well as the NBER business cycle, we are able to interpret the estimated permanent shock as being of structural policy origin and the transitory shock as being of (to politicians) exogenous business cycle origin. Apart from strong partisan effects, we find that Republicans attempts to reduce the public sector during the first half of the term and that Republicans also have been unlucky to have been in office during the major part of the negative (exogenous) business cycle shocks.

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Paper provided by Lund University, Department of Economics in its series Working Papers with number 2001:22.

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Length: 24 pages
Date of creation: 16 Nov 2001
Date of revision:
Handle: RePEc:hhs:lunewp:2001_022

Contact details of provider:
Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/
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Find related papers by JEL classification:
C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions
E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

This paper has been announced in the following NEP Reports:

NEP-ALL-2001-11-27 (All new papers)
NEP-CDM-2001-11-27 (Collective Decision-Making)
NEP-ENT-2001-11-27 (Entrepreneurship)
NEP-NET-2001-11-27 (Network Economics)
NEP-PBE-2001-11-27 (Public Economics)

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This page was last updated on 2009-12-2.

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