In this paper we study whether inflation expectations react on variations of election outcome expectations. Using data from 6 countries we show that such a link in fact exists and thus provides empirical evidence supportive to rational partisan theory of business cycles.

This paper contributes to the on-going empirical debate regarding the role of the RBC model and in particular of technology shocks in explaining aggregate fluctuations. To this end we estimate the model's posterior density using Markov-Chain Monte-Carlo (MCMC) methods. Within this framework we...