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We develop a model of political cycles driven by time-varying risk aversion. Agents choose to work in the public or private sector and to vote Democrat or Republican. In equilibrium, when risk aversion is high, agents elect Democrats---the party promising more redistribution. The model predicts...
Persistent link: https://www.econbiz.de/10012902363
The Bipartisan Campaign Reform Act of 2002 addressed two issues, soft money and independent expenditures on issue ads for electoral advocacy. The Supreme Court initially upheld most provisions in 2003 but subsequently weakened and struck down provisions on independent expenditures. I examine the...
Persistent link: https://www.econbiz.de/10012896155
Contributions by investor-owned companies play major roles in financing the campaigns of candidates for elective office in the United States. We look at the presidential level and analyze contributions by companies before an election and their stock market performance following US presidential...
Persistent link: https://www.econbiz.de/10009733230
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We document that a huge frustration shock, clearly unrelated to government's actions, was perceived to lead to substantial punishment at the polls months later. In particular, we provide evidence that Brazil's 7-1 humiliating defeat to Germany in the 2014 World Cup was perceived by financial...
Persistent link: https://www.econbiz.de/10011617490
Political news is known to be polarized, but standard explanations for polarization do not apply to financial news. Nevertheless, we find strong evidence of political polarization in the tone and coverage of corporate financial news. In particular, we find that the tone of corporate financial...
Persistent link: https://www.econbiz.de/10012841625
The extension of the franchise to social groups with less property and income is associated with greater income redistribution from the rich to the poor and extension in the provision of public goods, which leads to the growth of government expenditure. All of these expected changes are costly...
Persistent link: https://www.econbiz.de/10009656177
We develop a model of political cycles driven by time-varying risk aversion. Agents choose to work in the public or private sector and to vote Democrat or Republican. In equilibrium, when risk aversion is high, agents elect Democrats—the party promising more redistribution. The model predicts...
Persistent link: https://www.econbiz.de/10012962718
Persistent link: https://www.econbiz.de/10011973301
Persistent link: https://www.econbiz.de/10011627652