Abstract
Politics Alberto Alesina Influences from political competition on macroeconomic policy are often thought to be a source of economic fluctuations. Politicians are described as being driven by two, not mutually exclusive, main motivations: they want to be reelected and they harbour political, or ideological, biases. When such theories are confronted with actual cycles in a number of industrial countries, the pattern of inflation, unemployment, output, and budget deficits indicates that partisan policy making is a fairly widespread phenomenon, with more limited evidence that electoral preoccupations result in major fluctuations. The combination of partisanship and electoral cycles may easily result in socially undesirable outcomes. In particular the degree of politico-institutional stability and the independence of the Central Bank have a bearing on macroeconomic outcomes. These observations raise a number of important questions about the design of political institutions.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.