Variable Rational Partisan Business Cycles: Theory and Some Evidence

18 Pages Posted: 30 Dec 2002

See all articles by Jac C. Heckelman

Jac C. Heckelman

Wake Forest University - Department of Economics

Abstract

The Variable Rational Partisan Business Cycle model is developed, where agents face uncertainty regarding the timing and outcome of the next election. The model predicts that partisan influences on the economy persist throughout the government's rule and are further influenced, in the opposite direction, by which party ruled in the previous period. Party popularity also has a causal effect on the business cycle. Finally, the effects from changes in election timing expectations are dependent on which party ruled in the previous period. Empirical results for output and unemployment in Canada, Germany, and United Kingdom yield mixed support for the model.

JEL Classification: D72, E32

Suggested Citation

Heckelman, Jac C., Variable Rational Partisan Business Cycles: Theory and Some Evidence. Available at SSRN: https://ssrn.com/abstract=318620

Jac C. Heckelman (Contact Author)

Wake Forest University - Department of Economics ( email )

P.O. Box 7505
Winston-Salem, NC 27109
United States
(336) 758-5923 (Phone)
(336) 758-6028 (Fax)

HOME PAGE: http://www.wfu.edu/~heckeljc/jac.htm

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