Abstract
This paper focuses on alternative specifications ofpartisan political business cycles (Partisan Theory,Rational Partisan Theory and hysteresis-augmentedRPT). It elaborates on analogies of the natural ratehypothesis underlying all specifications and thecointegration concept. Accordingly, problems of thespecification of hypotheses, estimation and inferencein a cointegrating framework with politicalinterventions are treated. Super-exogeneity tests areshown to be equivalent to tests of the Lucas-critiqueand the RPT. Therefore, the concept ofsuper-exogeneity is transferred to empirical tests ofpartisan cycles. By this, a new testing framework ofpartisan cycles is developed and applied to Germanlabour market data.
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