EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/19057
  
Title:Electoral uncertainty, fiscal policy and macroeconomic fluctuations PDF Logo
Authors:Malley, Jim
Philippopoulos, Apostolis
Woitek, Ulrich
Issue Date:2005
Series/Report no.:CESifo working papers 1593
Abstract:In this paper we study the link between elections, fiscal policy and aggregate fluctuations. The set-up is a stylized dynamic stochastic general equilibrium model incorporating both technology and political re-election shocks. The later are incorporated via a two-party model with elections. The main theoretical prediction is that forward-looking incumbents, with uncertain prospects of re-election, find it optimal to follow relatively shortsighted fiscal policies, and that this hurts capital accumulation. Our econometric estimation, using U.S. data, finds a statistically significant link between electoral uncertainty and policy instruments and in turn macroeconomic outcomes.
Subjects:political uncertainty
business cycles & growth
optimal policy
hybrid maximum likelihood estimation
JEL:E6
D9
H5
H1
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
cesifo1_wp1593.pdf493.04 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/19057

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.