Political Business Cycles: An Emergent-Dynamic Reformulation
Richard E. Wagner
George Mason University - Department of Economics
October 2, 2011
GMU Working Paper in Economics No. 11-41
The literature on political business cycles follows two analytical conventions: (1) polity is reasonably reduced to a single agent who is either opportunistic or partisan and (2) economy is an equilibrated entity that is subject to politically inspired shocks. This paper pursues a different conceptualization of the relationship between politics and macro-level variability, and is based on three key differences from conventional formulations: (1) macro variables are not direct objects of choice but are just aggregates that emerge out of some micro structure of relationships, (2) a presumption that competitive processes are naturally turbulent replaces the standard focus on equilibrium states, and (3) polity and economy are treated not as point-mass entities but as an entangled ecology of enterprises. Within this alternative framework, variability is a normal feature of open competition, and with the intensity of that variability depending on the constitutional framework that governs the ecology of enterprises that comprise a political economy.
Number of Pages in PDF File: 27
Keywords: political business cycles, opportunistic cycles, partisan cycles, microfoundations, supervention, ecology of plans
JEL Classification: D72, E32, E61, H61
Date posted: October 3, 2011
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