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The political policy cycle: Presidential effort vs. presidential control

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  • Janet Pack

Abstract

After disentangling presidential budget proposals from budgetary changes attributable to fluctuations in the economy and to congressional action, we find consistent evidence for a presidential macroeconomic policy cycle attuned to the elctoral cycle. Proposed budgets are more expansionary in election years than at other times. The Congress, however, also plays a significant role in determining fiscal outcomes. Its budgets are systematically related to those of the President and in general reinforce presidential efforts to respond to the electoral cycle. Although Presidents generally propose quite conservative budgets, their proposals are more expansionary in presidential election years than in other years. The Congress, which generally adopts an expansionary fiscal policy ratifies this proposed macroeconomic policy electoral cycle by adopting even more expansionary budgets in presidential election years than they do at other times. Copyright Martinus Nijhoff Publishers 1987

Suggested Citation

  • Janet Pack, 1987. "The political policy cycle: Presidential effort vs. presidential control," Public Choice, Springer, vol. 54(3), pages 231-259, August.
  • Handle: RePEc:kap:pubcho:v:54:y:1987:i:3:p:231-259
    DOI: 10.1007/BF00125648
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    File URL: http://hdl.handle.net/10.1007/BF00125648
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    References listed on IDEAS

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    1. Frey, Bruno S & Schneider, Friedrich, 1978. "An Empirical Study of Politico-Economic Interaction in the United States," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 174-183, May.
    2. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    3. repec:cup:apsrev:v:71:y:1977:i:04:p:1467-1487_26 is not listed on IDEAS
    4. Fair, Ray C, 1978. "The Effect of Economic Events on Votes for President," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 159-173, May.
    5. repec:cup:apsrev:v:78:y:1984:i:02:p:356-371_25 is not listed on IDEAS
    6. MacRae, C Duncan, 1977. "A Political Model of the Business Cycle," Journal of Political Economy, University of Chicago Press, vol. 85(2), pages 239-263, April.
    7. Lindbeck, Assar, 1976. "Stabilization Policy in Open Economies with Endogenous Politicians," American Economic Review, American Economic Association, vol. 66(2), pages 1-19, May.
    8. William D. Nordhaus, 1975. "The Political Business Cycle," Review of Economic Studies, Oxford University Press, vol. 42(2), pages 169-190.
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    Cited by:

    1. Peter J. Boettke & Daniel J. Smith, 2016. "Evolving views on monetary policy in the thought of Hayek, Friedman, and Buchanan," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 29(4), pages 351-370, December.
    2. Janet Pack, 1988. "The Congress and fiscal policy," Public Choice, Springer, vol. 58(2), pages 101-122, August.
    3. Mounts, Wm. Jr. & Sowell, Clifford, 1995. "A statistical note on possible institutional regimes in budget policy," Journal of Macroeconomics, Elsevier, vol. 17(1), pages 149-160.
    4. Boyes, William J. & Mounts, WM. Jr. & Sowell, Clifford & Payne, James E., 1996. "All politics is local: The effect of fiscal and monetary constitutions on economic policy," Journal of Macroeconomics, Elsevier, vol. 18(4), pages 657-678.

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