We show that average excess returns during the last two years of the presidential cycle are significantly higher than during the first two years: 9.8 percent over the period 1948 2008. This pattern in returns cannot be explained by business-cycle variables capturing time-varying risk premia,...

This paper tests the policitcal dimensions of the presidential cycle effect in U.S. financial markets. The presidential cycle effect states that average stock market returns are significantly higher in the last two years compared to the first two years of a presidential term. We confirm the...

Over the past two decades, private equity has contributed to a shrinking of the U.S. stock market. We develop a political economy model of private equity activity to study the wider economic consequences of this trend. We show that private and social incentives to delist firms from the stock...

We analyze housing taxation from a political economy perspective. Our aim is to understand why the US tax system favors owner housing with respect to business capital despite the efficiency losses involved. The starting point of our analysis is the observation that housing wealth is much more...

This paper presents an empirical examination of economic and institutional development. Utilizing a novel data set on American Indian tribal nations, we investigate how constitutional design affects economic development, while holding the broader legal and political environment fixed....

This article aims to analyze the relationship between inflation and unemployment in the United States, in the 1960s and 2010, from the surplus approach. The objective is to compare this relationship in these two decades, which end with low unemployment rates, to understand the scenario of the...

The 2007-08 Global Financial Crisis is a watershed phenomenon that reshaped global capitalism. Stemming from the argument that the Crisis was caused by deregulation, this article assesses to what extent the financial industry influenced the legislative process underlying these reforms. The...

We assess the effects of U.S. tax policy reforms on inequality by applying a new decomposition method allowing us to disentangle the policy effect from changing market incomes. Over the period 1979-2007, the cumulative policy effect aggravated inequality by increasing the income share of the top...

Cross-country studies have found a negative relationship between income inequality and economic growth. The main problem with the cross-country analyses is the poor quality of the data on income distribution. This paper tests the robustness of the cross-country results to the use of a more...