Is the Political Business Cycle for Real?

37 Pages Posted: 21 Mar 2001

See all articles by S. Brock Blomberg

S. Brock Blomberg

Ursinus College

Gregory D. Hess

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Multiple version iconThere are 2 versions of this paper

Date Written: January 2001

Abstract

This paper constructs and examines a macroeconomic model which combines features from both real and political business cycle models. We augment a standard real business cycle tax model by allowing for varying levels of government partisanship and competence in order to replicate two important empirical regularities: First, that on average the economy expands early under Democratic Presidents and contracts early under Republican Presidents. Second, that Presidents whose parties successfully retain the presidency have stronger than average growth in the second half of their terms. The model generates both of these features that conform to U.S. Post World War II data.

JEL Classification: H1, H5, H8

Suggested Citation

Blomberg, S. Brock and Hess, Gregory D., Is the Political Business Cycle for Real? (January 2001). CESifo Working Paper Series No. 415, FRB of Cleveland Working Paper No. 00-16, Available at SSRN: https://ssrn.com/abstract=263126

S. Brock Blomberg

Ursinus College ( email )

Collegeville, PA 19426-2562
United States

Gregory D. Hess (Contact Author)

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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