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Political-Business Cycles in BRICS Economies: Evidence from Brazil


  • Celso José Costa Junior

    () (Ministerio de Economía, Universidad Estadual de Ponta Grossa (UEPG) & Fundação Getúlio Vargas (FGV), Brasil)

  • Alejandro C. García Cintado

    () (Universidad Pablo de Olavide (UPO) & UEPG)

  • Manuel Alejandro Hidalgo Pérez

    () (UPO & Secretaría General de Economía – Junta de Andalucía)


This paper uses a DSGE model with political-regime-dependent fiscal and monetary policies so as to examine political-business cycles in an emerging market such as Brazil under three different regimes – an "opportunistic regime" and "two partisan ones". The former regime seeks to identify whether within the period of seven quarters prior to the elections, the government manipulated the economy to increase the chances of getting reelected (or securing a successor). As for the latter two, they try to verify whether the macroeconomic strategies pursued by the "more leftist" governments differed from their "more right-wing" predecessors’ monetary and fiscal policies. Our results show that there exists an opportunistic behavior by all the governments studied as regards fiscal policy, and that from a macroeconomic viewpoint, President Rouseff’s administration fared differently than previous governments. However, monetary policy turns out to be independent of the regimes considered.

Suggested Citation

  • Celso José Costa Junior & Alejandro C. García Cintado & Manuel Alejandro Hidalgo Pérez, 2019. "Political-Business Cycles in BRICS Economies: Evidence from Brazil," Working Papers 19.09, Universidad Pablo de Olavide, Department of Economics.
  • Handle: RePEc:pab:wpaper:19.09

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    References listed on IDEAS

    1. repec:cup:apsrev:v:71:y:1977:i:04:p:1467-1487_26 is not listed on IDEAS
    2. Clémence Vergne, 2009. "Democracy, elections and allocation of public expenditures in developing countries," Post-Print hal-00368509, HAL.
    3. Kenneth Rogoff & Anne Sibert, 1988. "Elections and Macroeconomic Policy Cycles," Review of Economic Studies, Oxford University Press, vol. 55(1), pages 1-16.
    4. Schuknecht, Ludger, 2000. "Fiscal Policy Cycles and Public Expenditure in Developing Countries," Public Choice, Springer, vol. 102(1-2), pages 115-130, January.
    5. Nakaguma, Marcos Yamada & Bender, Siegfried, 2010. "Ciclos Políticos e Resultados Eleitorais: Um Estudo sobre o Comportamento do Eleitor Brasileiro," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(1), March.
    6. Alan S. Blinder & Mark W. Watson, 2016. "Presidents and the US Economy: An Econometric Exploration," American Economic Review, American Economic Association, vol. 106(4), pages 1015-1045, April.
    7. Celso Jose Costa Junior, 2016. "Understanding DSGE models [Paperback]," Vernon Press Titles in Economics, Vernon Art and Science Inc, edition 1, number 163.
    8. Fabio Milani, 2010. "Political Business Cycles In The New Keynesian Model," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 896-915, October.
    9. Vergne, Clémence, 2009. "Democracy, elections and allocation of public expenditures in developing countries," European Journal of Political Economy, Elsevier, vol. 25(1), pages 63-77, March.
    10. Celso Jose Costa Junior, 2016. "Understanding DSGE models," Vernon Press Titles in Economics, Vernon Art and Science Inc, edition 1, number 70.
    11. Celso Jose Costa Junior, 2016. "Understanding DSGE models [E-book]," Vernon Press Titles in Economics, Vernon Art and Science Inc, edition 1, number 164.
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    More about this item


    political cycles; monetary policy; fiscal policy; Oaxaca model; Dynamic Stochastic General Equilibrium (DSGE) model.;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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