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Do business cycle peaks predict election calls in Canada?

  • Voia, Marcel-Cristian
  • Ferris, J. Stephen

This paper examines the empirical regularity that in Canada business cycle peaks and federal elections have tended to arise together over the long post-Confederation time period following 1867. We argue that rather than being simultaneous, the two events are related sequentially and that causality can be identified properly if the selection issue associated with observed events is addressed carefully. Our results suggest that business cycle peaks lead federal elections rather than the other way around. Such a finding reinforces the hypothesis of strategic election timing for such countries and is insightful in helping to explain why the presence of a political business cycle is harder to establish for parliamentary governments where the date of the next election is under the control of the incumbent governing party than in democratic systems where governing durations and election dates are fixed.

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Article provided by Elsevier in its journal European Journal of Political Economy.

Volume (Year): 29 (2013)
Issue (Month): C ()
Pages: 102-118

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Handle: RePEc:eee:poleco:v:29:y:2013:i:c:p:102-118
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505544

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  18. Winer, Stanley L. & Ferris, J. Stephen, 2008. "Searching for Keynesianism," European Journal of Political Economy, Elsevier, vol. 24(2), pages 294-316, June.
  19. Cargill, Thomas F & Hutchison, Michael M, 1991. "Political Business Cycles with Endogenous Election Timing: Evidence from Japan," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 733-39, November.
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