An empirical study of politico-economic interaction in the US
Popularity and reaction functions as the main relationships between the economic and political sectors are theoretically derived and empirically estimated with quarterly data for the U.S. One of the purposes is to endogenize government behavior in macro-econometric models. Unemploymentj inflation (negatively) and the growth of consumption (positively) influence presidential popularity. The presidents who fear not to be reelected use in turn their policy instruments (public expenditures and jobs) to increase their popularity. There is also some indication that the presidents pursue ideological goals when they are confident to win the upcoming election.
|Date of creation:||1976|
|Date of revision:|
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- Frey, Bruno S, 1974. "The Politico-Economic System: A Simulation Model," Kyklos, Wiley Blackwell, vol. 27(2), pages 227-54.
- Wright, Gavin, 1974. "The Political Economy of New Deal Spending: An Econometric Analysis," The Review of Economics and Statistics, MIT Press, vol. 56(1), pages 30-38, February.
- Lawrence Lau & Bruno Frey, 1971. "Ideology, public approval, and government behavior," Public Choice, Springer, vol. 10(1), pages 21-40, March.
- Crotty, James R, 1973. "Specification Error in Macro-Econometric Models: The Influence of Policy Goals," American Economic Review, American Economic Association, vol. 63(5), pages 1025-30, December.
- 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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