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Author:Blomberg, S. Brock 

Working Paper
Is the political business cycle for real?
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.
AUTHORS: Hess, Gregory D.; Blomberg, S. Brock
DATE: 2000

Working Paper
Growth, political instability, and the defense burden
This paper develops a model to examine the economic effects of political instability and military expenditure. In the model, "kleptocracies" use defense as "imperfect" insurance against the probability of being overthrown. Increasing defense has a secondary effect of augmenting the human capital stock (a spin-off effect). However, defense investment comes at the expense of consuming scarce resources (a crowding out effect). The paper's central contribution is to model each of these effects and their relationship to one another. The resulting theory predicts that the equilibrium is Pareto inefficient and that increased political instability and increased defense can inhibit economic growth. Empirically, increases in political instability are found to decrease growth while increases in defense are found to decrease political instability. The paper also finds that increases in defense have a direct negative effect on growth, although the relation is weak. The weak relation implies the aforementioned crowding out effect is largely mitigated by the spin-off effect.
AUTHORS: Blomberg, S. Brock
DATE: 1992

Working Paper
Politics and exchange rate forecasts
Standard exchange rate models perform poorly in out-of-sample forecasting when compared to the random walk model. We posit part of the poor performance of these models may be due to omission of political factors. We test this hypothesis by including political variables that capture party-specific, election-specific and candidate-specific characteristics. Surprisingly, we find our political model outperforms the random walk in out-of-sample forecasting at one to twelve month horizons for the pound/dollar, mark/dollar, pound/mark and the trade-weighted dollar, mark, and pound exchange rates.
AUTHORS: Blomberg, S. Brock; Hess, Gregory D.
DATE: 1996

Journal Article
Colloquium on U.S. wage trends in the 1980s: afternoon session: summary of discussion
AUTHORS: Gabriel De Kock; Blomberg, S. Brock
DATE: 1995-01

Journal Article
The commodity-consumer price connection: fact or fable?
The recent surge in commodity prices has rekindled interest in their power to predict consumer price inflation. But is this interest warranted? In examining the empirical relationship between commodity prices and consumer price inflation, this article finds that commodities' reputation as useful leading indicators of inflation is actually based more on fable than fact. Testing eight commonly used indexes, the authors conclude that although commodities had some predictive power in the past, the commodity-consumer price connection has broken down in the more recent period. They argue that this shift primarily reflects the diminished role of traditional commodities in U.S. production and the "sterilization" of some inflation signals by offsetting monetary policy actions.
AUTHORS: Blomberg, S. Brock; Harris, Ethan S.
DATE: 1995-10

Report
Industry restructuring measures and productivity: evidence from the 1980s
This paper analyzes the empirical relationship between corporate restructuring and productivity. We estimate neoclassical production functions and factor demand functions to analyze the importance of restructuring in improving resource allocation and productivity. We find, at most, restructuring may have spurred the substitution of capital for labor in some industries, helping to set the stage for increased labor productivity. However, there is little evidence that restructurings, themselves, aided in the improvement of true technological progress.
AUTHORS: Blomberg, S. Brock; Steindel, Charles
DATE: 1995

Report
A model of voter choice in a life cycle setting
AUTHORS: Blomberg, S. Brock
DATE: 1994

Report
Scoring political economy models: a multiple equilibrium approach
AUTHORS: Cohen, Gerald D.; Blomberg, S. Brock
DATE: 1994

Report
A simple model of conflicting horizons
AUTHORS: Blomberg, S. Brock
DATE: 1994

Report
Growth, political instability and the defense burden
AUTHORS: Blomberg, S. Brock
DATE: 1994

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