Political Parties and the Business Cycle in the United States, 1948-1984

Alberto Alesina and Jeffrey Sachs

No 1940, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper tests the existence and the extent of a politically induced business cycle in the U.S. in the post-World War II period. The cycle described in this paper is different from the traditional "political business cycle" of Nordhaus. It is based on a systematic difference between the monetary policies of the two parties in a model with labor contracts. From an explicit optimization problem we derive a system of equations for output and money growth. Then we successfully test the non-linear restriction imposed by the theory on the parameters of the system of equations. We cannot reject the hypothesis that money growth has been systematically different under the two types of administration and that this difference contributes to explain output fluctuations.

Date: 1986-06
Note: EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Alesina, Alberto and Jeffrey Sachs, "Political Parties and the Business Cycle in the United States, 1948-1984." Journal of Money Credit and Banking, Vol. 20, No. 1, February 1988, pp. 63-82.

Downloads: (external link)
http://www.nber.org/papers/w1940.pdf (application/pdf)

Related works:
Journal Article: Political Parties and the Business Cycle in the United States, 1948-1984 (1988)
Working Paper: Political Parties and the Business Cycle in the United States, 1948-1984 (1988)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:1940

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w1940

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by (wpc@nber.org).