Macroeconomic Policy and Elections in OECD Democracies

Gerald Cohen, Alberto Alesina and Nouriel Roubini

Scholarly Articles from Harvard University Department of Economics

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: 1) We find very little evidence of pre-electoral effects on economic outcomes, in particular, on GDP growth and unemployment; 2) We see some evidence of "political monetary cycles," that is, expansionary monetary policy in election years; 3) We also observe indications of "political budget cycles," or "loose" fiscal policy prior to elections; 4) 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.

Date: 1992
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Published in Economics & Politics

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http://dash.harvard.edu/bitstream/handle/1/4553023/alesina_macroeconomicoecd.pdf (application/pdf)

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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Persistent link: https://EconPapers.repec.org/RePEc:hrv:faseco:4553023

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