We examine the explanatory power of a political-business cycle theory in which governments practice short-run policy to lessen the impact of exogenous shocks. Governments have ideological objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve....

We examine the explanatory power of a political-business cycle theory in which governments practice short-run policy to lessen the impact of exogenous shocks. Governments have ideological objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve....

Subject of this book is the intersection between political science and macroeconomics. The central idea is the existence of a political economic equilibrium in which the government acts to dampen the business cycle. The election cycle implies that this equilibrium may be a cycle rather than a...

Abstract. Representative democracy is a principal-agent institution. Voter influence over macroeconomic policy should be noticeable during election years when the president (agent) and median voter (principal) disagree about goals. They might disagree due to the prospective benefit of choosing a...

In the new Keynesian model of endogenous stabilization governments have objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve. Because they react more quickly to inflation shocks than private agents, governments can lean against the...

A simple model of activist macroeconomic policy derives a reaction function by assuming that rational governments have performance objectives, but are constrained by the Phillips curve. Although not formally modeled, governments apply a variety of instruments to influence inflation and output,...