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The Political Business Cycle: New Evidence from the Nixon Tapes

Author

Listed:
  • BURTON A. ABRAMS
  • JAMES L. BUTKIEWICZ

Abstract

Drawing from the personal tape recordings made during the presidency of Richard Nixon, we uncover and report in this paper new evidence that Nixon manipulated Arthur Burns and the Federal Reserve Bank into creating a political business cycle that helped secure Nixon's reelection victory in 1972. Nixon understood the risks that his desired monetary policy imposed but chose to trade longer‐term economic costs to the economy for his own short‐term political benefit.
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Suggested Citation

  • Burton A. Abrams & James L. Butkiewicz, 2012. "The Political Business Cycle: New Evidence from the Nixon Tapes," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44, pages 385-399, March.
    • Handle: RePEc:mcb:jmoncb:v:44:y:2012:i::p:385-399
    DOI: j.1538-4616.2011.00492.x
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    Citations

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    Cited by:

    1. Eric Dubois, 2016. "Political business cycles 40 years after Nordhaus," Public Choice, Springer, vol. 166(1), pages 235-259, January.
    2. Hack, Lukas & Istrefi, Klodiana & Meier, Matthias, 2023. "Identification of Systematic Monetary Policy," CEPR Discussion Papers 17999, C.E.P.R. Discussion Papers.
    3. Chiu, Eric M.P., 2020. "Reexamining the Macroeconomic Policy Cycle in Taiwan: Evidence from the Central Bank’s Monetary Reaction Function," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 61(2), pages 89-110, December.
    4. Andrew Bossie, 2013. "The Effect of Fiscal Policy Shocks on the Flow of Funds," 2013 Papers pbo741, Job Market Papers.
    5. Jonathan W. Plante, 2025. "The United States fiscal constitution since the congressional budget impoundment and control act," Constitutional Political Economy, Springer, vol. 36(2), pages 200-223, June.
    6. Burton A. Abrams & James L. Butkiewicz, 2017. "The political economy of wage and price controls: evidence from the Nixon tapes," Public Choice, Springer, vol. 170(1), pages 63-78, January.
    7. Funashima, Yoshito, 2015. "The Fed-Induced Political Business Cycle," MPRA Paper 63654, University Library of Munich, Germany.
    8. Alexander Dentler, 2019. "Did the fed raise interest rates before elections?," Public Choice, Springer, vol. 181(3), pages 239-273, December.
    9. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.
    10. Funashima, Yoshito, 2016. "The Fed-induced political business cycle: Empirical evidence from a time–frequency view," Economic Modelling, Elsevier, vol. 54(C), pages 402-411.
    11. Bodea, Cristina & Kerner, Andrew, 2022. "Fear of inflation and gender representation in central banking," European Journal of Political Economy, Elsevier, vol. 74(C).
    12. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Post-Print hal-01291401, HAL.
    13. James L. Butkiewicz & Scott Ohlmacher, 2021. "Ending Bretton Woods: evidence from the Nixon tapes," Economic History Review, Economic History Society, vol. 74(4), pages 922-945, November.
    14. Simon Bilo & Richard Wagner, 2015. "Neutral money: Historical fact or analytical artifact?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(2), pages 139-150, June.
    15. Sonan Memon, 2022. "Inflation in Pakistan: High-Frequency Estimation and Forecasting," PIDE-Working Papers 2022:12, Pakistan Institute of Development Economics.

    More about this item

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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