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Political Cycles (political + cycle)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting100%

Selected Abstracts

DISTRIBUTIONAL CONFLICT, POLITICAL CYCLES AND GROWTH

THE MANCHESTER SCHOOL, Issue 4 2005
CHRISTIANE CLEMENS
This paper discusses the emergence of endogenous redistributive cycles in a stochastic growth model with incomplete asset markets and heterogeneous agents who vote on the degree of progressivity in the tax-transfer scheme. The model draws from Bénabou (in B. S. Bernanke and J. J. Rotemberg (eds), NBER Macroeconomics Annual, Vol. 11, Cambridge, MA, MIT Press, pp. 11,74) and ties the bias in the distribution of political power to the degree of inequality in the society, thereby triggering redistributive cycles which then give rise to a nonlinear, cyclical pattern of savings rates, growth and inequality over time. [source]

Political Cycles in the Australian Stock Market since Federation

THE AUSTRALIAN ECONOMIC REVIEW, Issue 4 2009
Andrew C. Worthington
This article examines the political cycles in Australian stock returns from 1901,2005. The article defines the political cycle in terms of the party in power, ministerial tenure and election information effects. The market variables are returns, excess returns over inflation and excess returns over interest rates. Descriptive analysis suggests differences in the variance of returns under Labor and non-Labor ministries, but no significant differences in mean returns. Using a generalised autoregressive conditional heteroskedastistic-M model, returns are found to be higher only for non-Labor ministries before 1949 and there is no difference in excess returns over inflation or interest throughout the full sample. [source]

POLITICAL MONETARY CYCLES UNDER ALTERNATIVE INSTITUTIONS: THE INDEPENDENT TREASURY AND THE FEDERAL RESERVE

ECONOMICS & POLITICS, Issue 3 2005
Jac C. Heckelman
The theory of opportunistic political business cycles predicts incumbent politicians will alter their economic policies to spur short-run growth to attract additional votes for the upcoming election. There has not been much emphasis on the possibility of historical political business cycles prior to the Keynesian Revolution. No study has yet undertaken a systematic approach to testing for policy cycles during this period. Our study will bridge this gap by considering cycles in monetary policy for the periods of 1879,1914 until the start of Fed operations, and 1914,1932 until abandonment of the gold standard. To properly test for political cycles, it is necessary to develop reaction functions for the Treasury and compare against the reaction function later held by the Fed. This also reveals that creation of an independent monetary authority to be insulated from political pressures changed the manner in which policy was directed, aside from political issues. The evidence is not consistent, however, with monetary cycles closely tied to electoral concerns. [source]

Signaling in Political Budget Cycles: How Far Are You Willing to Go?

JOURNAL OF PUBLIC ECONOMIC THEORY, Issue 2 2005
JORGE MIGUEL STREB
A key assumption in the literature on political cycles with rational voters and opportunistic politicians is that opportunism is common knowledge. In this framework, political cycles have been interpreted as a signal of competency. However, if opportunism is not common knowledge, cycles may no longer indicate competency, but rather opportunism. This is because highly opportunistic incumbents are willing to go farther to be reelected. Since political cycles require discretionality to reallocate budget items, a decrease of discretionality curbs cycles. It may also make elections more effective at selecting competent incumbents. [source]

Political Cycles in the Australian Stock Market since Federation

THE AUSTRALIAN ECONOMIC REVIEW, Issue 4 2009
Andrew C. Worthington
This article examines the political cycles in Australian stock returns from 1901,2005. The article defines the political cycle in terms of the party in power, ministerial tenure and election information effects. The market variables are returns, excess returns over inflation and excess returns over interest rates. Descriptive analysis suggests differences in the variance of returns under Labor and non-Labor ministries, but no significant differences in mean returns. Using a generalised autoregressive conditional heteroskedastistic-M model, returns are found to be higher only for non-Labor ministries before 1949 and there is no difference in excess returns over inflation or interest throughout the full sample. [source]