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Macroeconomic Policy And Elections In Oecd Democracies

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  • Alberto Alesina
  • Gerald D. Cohen
  • Nouriel Roubini

Abstract

The purpose of this paper is to test for evidence of opportunistic "political business cycles" in a large sample of 18 OECD economies. Our results can be summarized as follows: 1) We find very little evidence of pre-electoral effects on economic outcomes, in particular, on GDP growth and unemployment; 2) We see some evidence of "political monetary cycles," that is, expansionary monetary policy in election years; 3) We also observe indications of "political budget cycles," or "loose" fiscal policy prior to elections; 4) Inflation exhibits a post-electoral jump, which could be explained by either the pre-electoral "loose" monetary and fiscal policies and/or by an opportunistic timing of increases in publicly controlled prices, or indirect taxes. Copyright 1992 Blackwell Publishers Ltd..

Suggested Citation

  • Alberto Alesina & Gerald D. Cohen & Nouriel Roubini, 1992. "Macroeconomic Policy And Elections In Oecd Democracies," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 1-30, March.
  • Handle: RePEc:bla:ecopol:v:4:y:1992:i:1:p:1-30
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    References listed on IDEAS

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    1. Ito, Takatoshi, 1991. "International impacts on domestic political economy: a case of Japanese general elections," Journal of International Money and Finance, Elsevier, vol. 10(1, Supple), pages 73-89, March.
    2. Benjamin M. Friedman & Kenneth N. Kuttner, 1989. "Money, Income and Prices After the 1980s," NBER Working Papers 2852, National Bureau of Economic Research, Inc.
    3. repec:fth:harver:1496 is not listed on IDEAS
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