Political Cycles and International Interdependence
This paper studies the features of political cycles in a setting of international interdependence caused by inflation linkages. The main results are the following. Political cycles caused by domestic elections are larger than without international linkages. Political cycles caused by domestic and foreign elections have opposite effects. If elections are held simultaneously at home and abroad, the amplitude of the cycle is smaller when the winning coalition is the same and larger when the winner is different. In all cases analysed not only the amplitude but also the sign of the cycles depends on the openness of the countries examined.
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Volume (Year): 58 (2005)
Issue (Month): 3 ()
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