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Business Cycles, Political Incentives and the Macroeconomy: Comparison of Models

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  • Reichenvater, Arno

Abstract

Politicians and political parties are faced with the problem of being elected into power, and later, of being re-elected. These political ambitions are often fuelled by policies that affect the entire economy and business cycles. The purpose of this paper is to compare the various models used to describe how political decision-making may affect business cycles. Both opportunistic and partisan models, and exchange rate manipulation are examined, and empirical evidence is used to view the validity of the models.

Suggested Citation

  • Reichenvater, Arno, 2007. "Business Cycles, Political Incentives and the Macroeconomy: Comparison of Models," MPRA Paper 5527, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:5527
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    References listed on IDEAS

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    Cited by:

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    2. Damir Piplica & Ivo Speranda, 2015. "Unemployment and investments in various political environments of The transition countries EU members," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 11(1), pages 23-37.

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    More about this item

    Keywords

    business cycles; partisan models; opportunistic models; politics;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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