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Monetary policy and presidential elections: A nonpartisan political cycle

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  • David Hakes

Abstract

This paper develops a Federal Reserve reaction function which relates policy intentions to forecasts of policy objectives. Pre- and postpresidential election estimates of this reaction function for the post-Accord period of 1953–1984 suggest two conclusions: (1) the Federal Reserve reacts differently to economic conditions in the pre- and postelection biennia and (2) these differences in Fed behavior are not likely the result of partisan political influence, but rather the result of self-restraint by the Fed during preelection periods. Copyright Kluwer Academic Publishers 1988

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  • David Hakes, 1988. "Monetary policy and presidential elections: A nonpartisan political cycle," Public Choice, Springer, vol. 57(2), pages 175-182, May.
    • Handle: RePEc:kap:pubcho:v:57:y:1988:i:2:p:175-182
    DOI: 10.1007/BF00052404
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    1. Leroy Laney & Thomas Willett, 1983. "Presidential politics, budget deficits, and monetary policy in the United States; 1960–1976," Public Choice, Springer, vol. 40(1), pages 53-69, January.
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    Cited by:

    1. Thomas J. Pierce & Ken Rebeck, 2001. "Short‐Run Monetary Policy And The Macroeconomic Environment," Contemporary Economic Policy, Western Economic Association International, vol. 19(4), pages 434-443, October.
    2. Gamber, Edward N. & Hakes, David R., 2006. "The Taylor rule and the appointment cycle of the chairperson of the Federal Reserve," Journal of Economics and Business, Elsevier, vol. 58(1), pages 55-66.
    3. Oriola, Hugo, 2023. "Political monetary cycles: An empirical study," European Journal of Political Economy, Elsevier, vol. 79(C).
    4. Rob Roy McGregor, 1996. "Fomc Voting Behavior And Electoral Cycles: Partisan Ideology And Partisan Loyalty," Economics and Politics, Wiley Blackwell, vol. 8(1), pages 17-32, March.
    5. Helene Ehrhart, 2013. "Elections and the structure of taxation in developing countries," Public Choice, Springer, vol. 156(1), pages 195-211, July.
    6. Gamber, Edward N. & Hakes, David R., 1995. "Do shifts in federal reserve policy regimes explain interest rate anomalies?," Journal of Macroeconomics, Elsevier, vol. 17(2), pages 227-240.
    7. Price, Simon, 1997. "Political Business Cycles and Macroeconomic Credibility: A Survey," Public Choice, Springer, vol. 92(3-4), pages 407-427, September.
    8. Chung‐Hua Shen & David R. Hakes & Kenneth Brown, 1999. "Time‐Varying Response of Monetary Policy to Macroeconomic Conditions," Southern Economic Journal, John Wiley & Sons, vol. 65(3), pages 584-593, January.

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