Working Paper
Is the political business cycle for real?
Abstract: This paper's macroeconomic model combines features from both real and political business cycle models. It augments a standard real business cycle tax model by allowing for varying levels of government partisanship and competence in order to replicate two important empirical regularities: First, that on average the economy expands early under Democratic presidents and contracts early under Republican presidents. Second, that presidents whose parties successfully retain the presidency have stronger-than-average growth in the second half of their terms. The model generates both of these features in conformity with U.S. post-World War II data.
Keywords: Business cycles;
Access Documents
File(s):
File format is application/pdf
https://www.clevelandfed.org/~/media/content/newsroom%20and%20events/publications/working%20papers/2000/wp%200016%20is%20the%20political%20business%20cycle%20for%20real%20pdf.pdf?la=en
Description: Full text
Authors
Bibliographic Information
Provider: Federal Reserve Bank of Cleveland
Part of Series: Working Papers (Old Series)
Publication Date: 2000
Number: 0016