Premium
MACROECONOMIC POLICY AND ELECTIONS IN OECD DEMOCRACIES *
Author(s) -
Alesina Alberto,
Cohen Gerald D.,
Roubini Nouriel
Publication year - 1992
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/j.1468-0343.1992.tb00052.x
Subject(s) - economics , unemployment , inflation (cosmology) , fiscal policy , monetary policy , business cycle , monetary economics , politics , sample (material) , macroeconomics , political science , chemistry , physics , chromatography , theoretical physics , law
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.