Abstract
Moonlighting is one of the foremost reasons behind shadow activities in the Czech Republic. This paper is entrusted to study the existence of political business cycle to explain the regularity of moonlighting in the Czech Republic. We consider time series data of moonlighting for the period 1998Q1 to 2011Q2 for the study. Depending on the election periods of the Chamber of Deputies, we split the period of study into five regimes. The estimation of time trends of moonlighting for those regimes in terms of spline functions reveals the fact that the existence of political manipulation of moonlighting in the Czech Republic is absent for the periods of 1998Q2 to 2002Q2 and 2006 Q2 to 2010Q2.
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