This paper documents that surprise election outcomes - measured as deviations between realised vote shares and expected vote shares based on a newly constructed dataset of opinion polls and party and candidate vote shares close to election day - are causing non-negligible short-term contractions...

The paper offers an analysis of the issues related to the election dates synchronisation between two countries. The first purpose of the paper is to analyse the circumstances in which a government of a single country, considered to be a small economy, has incentives, or not, to synchronise the...

The political budget cycle (PBC) literature argues that governments expand deficits in election years. However, what happens when an economic downturn is expected? Will the government allow the deficit to expand even further, or will it resort to spending cuts and tax increases? When voters...

This paper aims to shed additional light on the existence of opportunistic and partisan political-business cycles in the Brazilian economy over the 1996-2016 period. To that end, it relies on two different approaches: (I) an Oaxaca model in the spirit of Blinder and Watson (2016); and (II) a...

Bank profitability leads the credit cycle. An increase in return on equity of the banking sector predicts rising credit-to-GDP ratios in a panel of 17 advanced economies spanning the years 1870 to 2015. However, increases in profitability also predict elevated crisis likelihood a few years...

We argue that when fiscal policy is endogenously determined, the incentives of redistributive politics associated with its formulation can endogenously add to the uncertainty and volatility that an economy faces. In particular, small shocks may get translated into large fluctuations. Our...

This paper builds a banking DSGE model based on endogenous loan to value ratios, taking the different relationship between different types of enterprises and banks into account. Due to the political connections between the bank and enterprises, loan to value ratio for favored enterprises (e.g....

This paper estimates the dynamics of the personal-bankruptcy rate over the business cycle by exploiting large cross-state variation in recessions and bankruptcies. We find that bankruptcy rates are significantly higher than normal during a recession and rise as a recession persists. After a...

This study investigates how firms’ lobbying activities change over business cycles. We show that firms lobby more during recessions. Aside from active lobbying firms, non-lobbying firms are also more likely to start lobbying during recessions. Corporate lobbying generally responds only to...

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...