 Temporal aggregation in political budget cyclesJorge Streb (), Daniel Lema () and Pablo Garofalo Economía Journal, 2012, vol. Volume 13 Number 1, issue Fall 2012, 39-78 Abstract: We build a panel with quarterly data from Latin American and OECD countries over the 1980-2005 period. Annual data strongly underestimate the effect of political budget cycles (PBCs) when a pre-electoral fiscal expansion is followed by a post-electoral contraction, since the effects cancel out in the calendar year of elections, but not in the four quarters up to elections. Quarterly data show there is a significant fiscal expansion in the four pre-electoral quarters that extends, perhaps, to the first post-electoral quarter. In the next three post-electoral quarters, there is a compensating fiscal contraction only in Latin America, so PBCs contributed to public debt build-up in the OECD. Our results contradict a widespread consensus on PBCs being only a developing country phenomena - a conclusion which might have been affected by temporal aggregation - and imply that studies of electoral cycles should be done from now on with quarterly, not annual, data. Keywords: political budget cycles; pre- and post-electoral effects; temporal aggregation; checks and balances (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:col:000425:010031 Access Statistics for this article More articles in Economía Journal from The Latin American and Caribbean Economic Association - LACEA Contact information at EDIRC. |
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