Book contents
- Frontmatter
- Contents
- Preface
- Contributors
- 1 Public choice in perspective
- Part I The need for and forms of cooperation
- Part II Voting rules and preference aggregation
- Part III Electoral politics
- 12 The spatial analysis of elections and committees: Four decades of research
- 13 Multiparty electoral politics
- 14 Interest groups: Money, information, and influence
- 15 Logrolling
- 16 Political business cycles
- Part IV Individual behavior and collective action
- Part V Public choice in action
- References
- Name index
- Subject index
16 - Political business cycles
Published online by Cambridge University Press: 04 May 2010
- Frontmatter
- Contents
- Preface
- Contributors
- 1 Public choice in perspective
- Part I The need for and forms of cooperation
- Part II Voting rules and preference aggregation
- Part III Electoral politics
- 12 The spatial analysis of elections and committees: Four decades of research
- 13 Multiparty electoral politics
- 14 Interest groups: Money, information, and influence
- 15 Logrolling
- 16 Political business cycles
- Part IV Individual behavior and collective action
- Part V Public choice in action
- References
- Name index
- Subject index
Summary
An overview and the pioneers
The traditional business cycle literature deals with economic fluctuations generated by the uncoordinated actions of private agents. During the century from the Napoleonic Wars to World War I many economies fluctuated systematically around their trend growth. Most researchers agree that these classical business cycles were generated by private agents (see Haberler 1937, 1958; Zarnowitz 1985). A large literature discusses how governments can diminish such fluctuations and stabilize the economy by providing coordination and steering.
However, it has often been shown that attempts to steer the economy have failed, sometimes because of mistakes, but more often because of political pressures and the interests of governments. Policies have been either inconsistent or defeated by other agents or exogenous shocks. Some think that the net result of all attempts to steer the economy is to make it less stable. The political business cycle (PBC) literature takes this view. Here the fluctuations are created by the government or by competition between the parties. A PBC is thus a business cycle generated by the political system. We shall cover only PBCs in developed democracies. Section 6.2 discusses the importance of PBCs compared with other business cycles.
The overview
The cycles are either (α) made deliberately or (β) occur because of the way the political system functions. PBCs of the a-type are made by a decisive agent who manipulates the economy to obtain an advantage.
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- Information
- Perspectives on Public ChoiceA Handbook, pp. 342 - 370Publisher: Cambridge University PressPrint publication year: 1996
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