Modeling Politics with Economic Tools: A Critical Survey of the Literature

Jan-Peter Olters

No 2001/010, IMF Working Papers from International Monetary Fund

Abstract: Whereas the economics discipline possesses a highly refined theoretical apparatus to analyze the effects of government behaviour on the economy, it has not (yet) managed to fully develop a positively formulated "economic theory of politics" that would permit the integration of the decision-making processes of voters, parties and governments with those of consumers and firms. Considerable recent advances notwithstanding, the large and heterogeneous body of literature has (so far) remained outside the economic mainstrain. The paper surveys the main approaches used to endogenize democratic elements and assesses the underlying reasons for researchers' renewed interest in this field.

Keywords: WP; Phillips curve; objective function; Endogenous politics; political business cycles; optimal government behavior; government behavior; center-left government; full employment; welfare economics; policy menu; utility function; Inflation; Unemployment; Personal income; Business cycles; Unemployment rate; North America; Western Europe (search for similar items in EconPapers)
Pages: 63
Date: 2001-01-01
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Citations: View citations in EconPapers (10)

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