Macroeconomic Policy and Elections in OECD Democracies

Alberto Alesina, Gerald D Cohen and Nouriel Roubini ()

No 608, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The purpose of this paper is to test for evidence of opportunistic `political business cycles' in a large sample of 18 OECD economies. Our results can be summarized as follows. First, we find very little evidence of pre-electoral effects of economic outcomes, in particular, on GDP growth and unemployment. Second, we see some evidence of `political monetary cycles', that is, expansionary monetary policy in election years. Third, we observe indications of `political budget cycles', or `loose' fiscal policy prior to elections. Fourth, inflation exhibits a post-electoral jump, which could be explained by either the pre-electoral `loose' monetary and fiscal policies and/or by an opportunistic timing of increases in publicly controlled prices, or indirect taxes.

Keywords: Elections; Political Business Cycle (search for similar items in EconPapers)
JEL-codes: D72 D78 E42 (search for similar items in EconPapers)
Date: 1992-01
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Citations: View citations in EconPapers (135)

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Related works:
Journal Article: MACROECONOMIC POLICY AND ELECTIONS IN OECD DEMOCRACIES* (1992)
Working Paper: Macroeconomic Policy and Elections in OECD Democracies (1992)
Working Paper: Macroeconomic Policy and Elections in OECD Democracies (1991)
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