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.

In the United Kingdom, Smith (2003;2004) has illustrated that prime ministers make their decision to call an election based on prospective economic conditions. If conditions are to worsen, leaders should seek to dissolve the government so as to maximize the chance for re-election. This argument...

We review the efficacy of three approaches to forecasting elections: econometric models that project outcomes on the basis of the state of the economy; public opinion polls; and election betting (prediction markets). We assess the efficacy of each in light of the 2004 Australian election. This...