A THEORY OF THE CORRUPT KEYNESIAN

Toke Aidt and Jayasri Dutta ()

Chapter 4 in New and Enduring Themes in Development Economics, 2009, pp 93-111 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractWe evaluate the impact of real business cycle shocks on corruption and economic policy in a model of entry regulation in a representative democracy. We find that corruption is pro-cyclical and regulation policy is counter-cyclical. Corrupt politicians engage in excessive stabilization of aggregate fluctuations and behave as if they were Keynesian. We also find that business cycle shocks can induce political instability with politicians losing office in recessions.

Keywords: Development Economics; Happiness; Well-Being; Political Economy; Economic of Labour; Agricultural Economics (search for similar items in EconPapers)
Date: 2009
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Related works:
Working Paper: A Theory of the Corrupt Keynesian (2008)
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