Political cycles, fiscal deficits and output spillovers in Europe
AbstractThis paper investigates whether national elections in Europe generate political cycles in other European countries, and, if so, whether these spillover effects are likely to survive inside EMU. The paper first tests whether elections in Germany affect macroeconomic outcomes in other European countries and then investigates the impact of elections on budget deficits. The results indicate that German politics significantly impacts macroeconomic variables in other European countries, and also that politics significantly affects the behaviour of European budgetary policy. The prospect of elections tends to increase public deficits in recessions, whereas left-wing governments tend to be more deficit-prone than right-wing governments regardless of the state of the economy. Moreover, the existence of political cycles spillovers among European countries suggest that there may be a need for electoral coordination. Copyright 2002 by Kluwer Academic Publishers
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Bibliographic InfoPaper provided by ULB -- Universite Libre de Bruxelles in its series ULB Institutional Repository with number 2013/7346.
Date of creation: Mar 2002
Date of revision:
Publication status: Published in: Public Choice (2002) v.111 n° 1-2,p.195-205
Other versions of this item:
- Sapir, Andre & Sekkat, Khalid, 2002. " Political Cycles, Fiscal Deficits, and Output Spillovers in Europe," Public Choice, Springer, Springer, vol. 111(1-2), pages 195-205, March.
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