Partisan Business Cycles Under Variable Election Dates
Posted: 14 Feb 2001
This paper develops a model where rational economic agents face uncertainty regarding the timing of elections and which party will emerge victorious should an election occur. This electoral uncertainty affects the macroeconomy, where the size and direction of the impacts are dependent on the party in power in the current and previous period, time elapsed since the last election, and party popularity. Leftist governments are expected to sustain higher output levels throughout their electoral term compared to rightwing governments, and the partisan differences will continue to increase until the next election.
JEL Classification: D72, E30
Suggested Citation: Suggested Citation