fighting with one hand tied behind the back political budget cycles in the west german states theories of political budget cycles have been contested because scholars find that incumbents can manipulate deficits in the pre election period only if fiscal transparency is low i argue that these findings do not generally rule out the possibility of fiscal electioneering governments may increase spending on highly visible policies the composition of the budget serves as a second best strategy it increases political support without straining the budget balance an empirical analysis of the west german states reveals alternative electoral budget strategies and ultimately point to the importance of analyzing how governments choose between alternative fiscal instruments

claim timing and ex post adverse selection many health care treatments are not urgent and may be delayed if patients so choose because insurance coverage is typically determined by the treatment date individuals may have incentives to strategically delay treatments to minimize out of pocket costs the strategic delay of treatment a particular form of moral hazard can be an important source of subsequent adverse selection in which ex ante identical individuals select insurance coverage based on their differing accumulation of previously delayed treatments this article investigates these forces empirically in the context of the missing market for dental insurance using rich claim level data my analysis reveals that approximately 40 of individuals strategically delay dental treatments when incentivized to do so and this flexibility in delaying treatment can explain why the market for dental insurance has largely unraveled more generally the counterfactual analysis suggests features such as open enrolment periods and contracting on pre existing conditions may be helpful tools in overcoming adverse selection in insurance contexts where the timing of uncertainty is not contractible

macroeconomic policy in a two party system as a repeated game this paper considers the interaction of two parties with different objectives concerning inflation and unemployment and rational and forward looking wage setters if discretionary policies are followed an economic cycle related to the political cycle results in equilibrium this cycle is significantly different from the traditional political business cycle reputational mechanisms due to the repeated interaction of the two parties and the public or commitments to a common policy rule can improve upon the discretionary outcome by reducing or eliminating the magnitude of the economic fluctuations

political partisanship and welfare state reform in advanced industrial societies in this article we evaluate two claims made in recent studies of the welfare states of advanced industrial societies first that welfare states have remained quite resilient in the face of demands for retrenchment and second that partisan politics have ceased to play a decisive role in their evolution addressing the first claim we present analysis from a new data set on unemployment insurance and sickness benefit replacement rates for 18 countries for the years 1975 99 we find considerably more evidence of welfare retrenchment during the last two decades than do recent cross national studies second we examine the end of partisanship claim by estimating the effects of government partisanship on changes in income replacement rates in sickness and unemployment programs our results suggest that contrary to claims that partisanship has little impact on welfare state commitments traditional partisanship continues to have a considerable effect on welfare state entitlements in the era of retrenchment

fiscal policy deficits and politics of subnational governments the case of the german laender the first part of the paper briefly describesinstitutional aspects of the german federal system andexamines the economic and fiscal performance of thegerman laender since 1970 taking into account theinstitutional settings especially the fact that thegerman laender cannot set tax rates individually wedevelop a highly stylized model of subnationalgovernments that do not have access to the tax rateinstrument and thus have to use expenditures as apolicy variable the model implies an expendituresmoothing policy of subnational governments andcomplements the famous tax smoothing model theempirical section examines whether governments ofvarious ideology show significant differences infiscal stabilization policy our results indicatethat regional differences in public debt accumulationand public expenditure policy in general is largelydetermined by interregional differences in economicperformance whereas we do not find any significantimpact on the ideological composition of the laendergovernments

the financial crisis and its impacts on global agriculture the financial crisis arose in the industrial countries but has affected developing countries through higher interest rates sharp changes in commodity prices and reductions in investment trade migration and remittances for most low income countries shocks that affect food prices or wage rates for unskilled workers seem likely to have the largest impact on poverty with the declines in key food prices associated with the crisis helping to reduce poverty while declining trade investment and remittance flows have had adverse impacts on the poor policies to address the crisis must include measures to deal with financial sector problems the resulting reductions in aggregate demand and the particular vulnerabilities of poor people given the complexity of the impacts from financial crises and commodity price shocks there is a strong case for developing better social safety net policies that can offset the adverse impacts of a wide range of different shocks on poor people without creating costly market distortions

educational business cycles the political economy of teacher hiring across german states 1992 2004 strong institutional constraints and better informed voters may lead re election seeking incumbents to shift the use of political business cycle mechanisms away from monetary and fiscal policy towards other policy domains that are more easily manipulable targetable and timeable we investigate teacher employment patterns at the state level in germany and find strong evidence of cycling mechanisms in the form of electioneering and honeymooning against a backdrop of a continuously shrinking total teachers pool german state level incumbents accelerate the hiring of new teachers during election periods and partly reverse this during politically safer points in the electoral cycle cycles are mediated by issue salience heightened attention to german public schooling after the notorious pisa 2000 tests further strengthens the manipulation of new teacher hiring for electoral purposes

does globalization affect growth evidence from a new index of globalization the study develops an index of globalization covering its three main dimensions economic integration social integration and political integration using panel data for 123 countries in 1970 2000 it is analysed empirically whether the overall index of globalization as well as sub indexes constructed to measure the single dimensions affect economic growth as the results show globalization indeed promotes growth the dimensions most robustly related with growth refer to actual economic flows and restrictions in developed countries although less robustly information flows also promote growth whereas political integration has no effect

the growth of public health expenditures in oecd countries do government ideology and electoral motives matter this paper empirically evaluates whether government ideology and electoral motives influenced the growth of public health expenditures in 18 oecd countries over the 1971 2004 period the results suggest that incumbents behaved opportunistically and increased the growth of public health expenditures in election years government ideology did not have an influence these findings indicate 1 the importance of public health in policy debates before elections and 2 the political pressure towards re organizing public health policy platforms especially in times of demographic change

the growth of social security electoral push or political pull the growth of social security electoral push or political pull i introduction during the post world war ii period the social security program was among the fastest growing programs in the federal budget surpassing defense spending as the largest category of expenditures in the mid seventies the program which disbursed only 132 million dollars in 1942 disbursed more than 156 billion dollars forty years late a thousand fold increase as a consequence of this growth and the program s recent financial problems a number of economists have turned their attention to the economics of social security recent examples include kahn 1988 boskin et al 1987 and veall 1986 yet only weaver 1982 and turner 1984 attempt to analyze the growth of the social security program weaver s legislative history of the program suggests that special interest groups had a major impact on social security programs turner argues that program benefit levels are affected by demographic changes which affect the cost of intergenerational redistribution in this paper we use the public choice approach to explain increases in benefit levels from 1946 1980 we develop and test three alternative public choice models of the politics of retirement benefit levels our analysis thus sheds light on an important question neglected by previous research have social security expenditures grown because special interest groups have effectively captured the congress or is congress simply responding to demands placed on it by the electorate the answer to this question is relevant to normative analysis of existing programs and to alternative proposals for reform in addition our study of the principal determinants of the growth of program benefit levels serves as an event study for assessing the merits of alternative theories of political decision making borcherding 1985 discusses two public choice explanations for the growth of public expenditures first public programs may expand as a result of the voting rules which underlie the political process when decisions are made by majority rule an increase in the median voter s demand for public services tends to increase public service levels because prospective candidates will revise their policy positions in order to be elected the wagner 1958 hypothesis for example maintains that increases in real income cause individuals to prefer both absolutely and relatively larger public expenditures borcherding notes that about 40 percent of the rate at which public sector spending has replaced private sector spending over the past eighty years can be explained with a median voter approach such an approach does better in what borcherding calls traditional areas of public expenditure where a median voter model can account for about 73 percent of the rate at which public expenditures excluding transfers have displaced private expenditures the median voter might favor public transfers to the elderly for two reasons first he may have an interdependent utility function in which the plight of the elderly poor arouses a charitable response while the redistribution from young to old does not simply target the old poor as a group the elderly do seem to be relatively less wealthy than the middle aged and the yound if one considers the average capitalized value of future income receipts from labor and capital second to the extent that the social security program offers a connection between reductions in current consumption and increases in future consumption it is a rather complex savings and insurance program the median voter s motivation for transferring monies to today s elderly may be a vehicle for ensuring future transfers to himself while this explanation is difficult to motivate at the individual level since a savings program for future retirement need not pay anything to today s elderly a continuing program of tax funded transfers is plausible method of establishing the moral constitution necessary to ensure that future transfers do in fact take place

payment discipline depends on management ethics the main aim of the study was to identify if management ethics have a positive impact on payment discipline our sample includes 273 slovene enterprises which represent 9 1 of 2978 slovenian enterprises with 10 or more employees selected from the database of the slovenian rating agency i d o o to determine management ethics we used the corporate ethical virtues measurement instrument questionnaire the data concerning average late payments were also obtained from the database the slovenian rating agency i d o o we conducted a factor analysis using the enter method we confirmed that the influence of management ethics have a positive impact on average payment delays expressed in days

searching for political business cycles in germany one reslt of the revitalised literature on political business cycles is that there are signs in german data that elections and ideology have an impact however using monthly data for the period 1950 1989 and standard methods of time series analysis we reject both the nordhaus hypothesis of opportunistic cycles and the partisan approaches by hibbs ans alesina we show that some results are sensitive to the assumption of stationarity there are signs of policy cycles in m1 it is hard though to bring this in line with the rogoff hypothesis of rational opportunistic cycles because of the german institutional setting

the rise in the disability rolls and the decline in unemployment between 1984 and 2001 the share of nonelderly adults receiving social security disability insurance income di rose by 60 percent to 5 3 million beneficiaries rapid program growth despite improving aggregate health appears to be explained by reduced screening stringency declining demand for less skilled workers and an unforeseen increase in the earnings replacement rate we estimate that the sum of these forces doubled the labor force exit propensity of displaced high school dropouts after 1984 lowering measured u s unemployment by one half a percentage point steady state calculations augur a further 40 percent increase in the rate of di receipt

bread and the attrition of power economic events and german election results aggregate votes for incumbent parties in post war germany were determined by the weighted average growth of real per capita disposable income each percentage point of per capita real disposable income growth sustained over the legislative term yielded approximately two percentage points of votes in germany no other economic variables add value or significantly perturb the coefficients of our model however attrition of power reduced the vote share in election years 1961 1994 and 1998

economic freedom and government ideology across the german states potrafke n economic freedom and government ideology across the german states regional studies this paper examines whether government ideology influenced economic freedom across the german states the results show that in former west germany rightwing governments promoted economic freedom whereas leftwing governments confined it in the former east germany however rightwing governments were not associated with propagating economic freedom this finding appears to conflict with the common notion of policy convergence at the federal level in fact the observed variation in political preferences across states may indicate that politicians gratify the local electorate and in return offer moderate policies at the federal level potrafke n potrafke n la liberte economique et l ideologie du gou

electoral cycles in active labor market policies we examine how electoral motives influence active labor market policies that promote short term job creation such policies reduce measures of unemployment using german state data for the period 1985 to 2004 we show that election motivated politicians pushed job promotion schemes before elections

insurance induced moral hazard a dynamic model of within year medical care decision making under uncertainty health insurance may lead individuals to overconsume medical care many studies explore this moral hazard using models that aggregate medical care decisions up to the annual level using employer employee matched data from the medical expenditure panel survey meps i estimate moral hazard using a dynamic model of within year medical care consumption that allows for endogenous health transitions variation in medical care prices and individual uncertainty within a health insurance year i then estimate moral hazard under a second set of conditions that are consistent with the assumptions of most annual decision making models the within year decision making model produces a moral hazard estimate that is 19 2 larger than the alternative model i highlight the importance of controlling for within year dynamics in a model of medical care consumption using a counterfactual policy simulation that implements the individual mandate provision of the 2010 patient protection and aordable care act i nd that full implementation of the policy decreases the percentage of uninsured individuals in the population being analyzed from 11 8 to 6 0 furthermore when all uninsured individuals are forced into coverage their predicted annual medical care expenditure increases by 45 5

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

political budget cycles the case of the western german lander this paper focuses on the issue of the electoral andideological cycles in state government budget for the elevenwestern german lander we verify this hypothesis over theperiod 1974 1994 for the following budgetary variables totalexpenditures surplus deficit administration health care education roads and social security benefits while overallour results seem to show that generally the party variabledoes not play a systematic role in spending decisions theyprovide some support to the opportunistic cycle theory showingthat the only relevant phenomenon is the effect of theupcoming election on the government spending inclinations

the rise of the modern welfare state ideology institutions and income security analysis and evidence in the 25 year period between 1960 and 1985 there was a great expansion of welfare state programs throughout the west the fraction of gdp accounted for by social expenditures doubled in much of europe and grew by 40 50 in many other oecd nations after 1985 growth in social insurance programs slowed relative to other parts of the economy this paper explores the extent to which institutions and ideological shifts may have accounted for the period of rapid growth for differences in the extent of that growth and for the subsequent reduction in the growth rates of social insurance programs

economic impacts of new unionization on private sector employers 1984 2001 economic impacts of unionization on employers are difficult to estimate in the absence of large representative data on establishments with union status information estimates are also confounded by selection bias because unions could organize at highly profitable enterprises that are more likely to grow and pay higher wages using multiple establishment level data sets that represent establishments that faced organizing drives in the united states during 1984 1999 this paper uses a regression discontinuity design to estimate the impact of unionization on business survival employment output productivity and wages essentially outcomes for employers where unions barely won the election e g by one vote are compared with those where the unions barely lost the analysis finds small impacts on all outcomes that we examine estimates for wages are close to zero the evidence suggests that at least in recent decades the legal mandate that requires the employer to bargain with a certified union has had little economic impact on employers because unions have been somewhat unsuccessful at securing significant wage gains

the educational and professional background of central bankers and its effect on inflation an empirical analysis we assume that central banks can control inflation so that inflation rates reflect the preferences of the central bank council the hypothesis to be tested is that these preferences depend on the central bankers educational and or professional background in a panel data analysis for the euro area and eleven countries since 1973 we explain inflation either by the weights with which the educational and professional characteristics of the 391 council members were represented in the various central bank councils or by the education or profession of the median council members control variables are added using professional background weights we find that former members of the central bank staff and in some specifications former insurance executives commercial bankers other businessmen and public servants prefer significantly lower inflation rates than former union leaders and politicians do in the median voter analysis former central bankers commercial bankers businessmen and public servants are also significantly more inflation averse than economic scholars as for the education of the council members our results are less robust however if the median member of the central bank council has studied business the inflation rate is significantly lower than if she has studied economics taking educational and professional background together central banks seem to attract or produce primarily economists who are monetary conservatives whereas keynesian economists are more prominent in academia jel classification e42 e58

us presidential elections and real gdp growth 1961 2004 in this paper i show that since 1960 an electoral cycle in us output growth can both be seen by the naked eye in the raw data and confirmed by a statistical analysis that allows for rational partisan effects as well as a wide range of control variables that is controlling for multiple lags of interest rate changes inflation money growth energy prices lagged output growth government spending or its growth and temporary partisan effects the timing of elections exerts a significant influence on quarterly real gdp growth

a theory of divided government this paper extends the spatial theory of voting to an institutional structure in which policy choices depend upon not only the executive but also the composition of the legislature voters have incentives to be strategic since policy reflects the outcome of a simultaneous election of the legislature and the executive and since the legislature s impact on policy depends upon relative plurality to analyze equilibrium in this game between voters we apply coalition proof type refinements the model has several testable implications which are consistent with voting behavior in the united states for instance the model predicts a split tickets where some voters vote for one party for president and the other for congress b for some parameter values a divided government with different parties controlling the executive and the majority of the legislature and c the midterm electoral cycle with the party holding the presidency always losing votes in midterm congressional elections

politics institutions and welfare spending in industrialized democracies 1960 82 electoral turnout as well as left and center governments increase welfare effort that the welfare efforts of governments led by particular types of parties show significant differences and vary notably with the strength of oppositional and junior coalitional parties and that relatively neocorporatist centralized and traditionalistic polities are high on welfare effort overall our findings suggest that contrary to many claims both partisan and nonpartisan facets of democratic politics and political institutions shape contemporary social welfare effort

the impact of the massachusetts health care reform on health care use among children in 2006 massachusetts enacted a major health care reform aimed at achieving near universal coverage in the state while other studies have found that this reform substantially affected the use of health services in general the impact of the reform on children is largely unexplored children are of special interest to policymakers because it is widely believed that better health in early childhood results in large payoffs to adult health and achievement i analyze how the reform affected the insurance coverage health care utilization patterns and health outcomes of children under 18 years old

inequality social insurance and redistribution is the political support for welfare policy higher or lower in less egalitarian societies we answer the question using a model of welfare policy as publicly financed insurance that pays benefits in a redistributive manner when voters have both redistributive and insurance motives for supporting welfare spending the effect of inequality depends on how benefits are targeted greater inequality increases support for welfare expenditures when benefits are targeted to the employed but decreases support when benefits are targeted to those without earnings with endogenous targeting support for benefits to those without earnings declines as inequality increases whereas support for aggregate spending is a v shaped function of inequality statistical analysis of welfare expenditures in advanced industrial societies provides support for key empirical implications of the model

divided government versus incumbency externality effect quasi experimental evidence on multiple voting decisions abstract this paper explores the causal relationship between vote outcomes in different elections we ask 1 does the partisan identity of the mayor influence the voter s decision in subsequent town council elections 2 do voters condition their vote for the mayor on the result of the last council election the analysis mainprod type flply relies on a regression discontinuity design focusing on close election outcomes based on municipal level data for germany we find that the party of the mayor can receive a significant bonus in the next town council election moreover voters punish mayor candidates of parties that performed strongly in earlier council elections throughout the paper we highlight how these findings can be related to an incumbency externality effect and to the theory of divided government

political complements in the welfare state health care and social security abstract all oecd countries target a large majority of their welfare spending to the elderly through public pensions and health care programs spending in both programs has largely increased in the past decades often more than the share of elderly in the population we suggest that these phenomena may be due to political complementarities between these two transfer programs we show that these two programs may coexist because public health care may increase the political constituency in favor of social security and vice versa specifically public health decreases the absolute longevity differential between low and high income individuals therefore rising the retirement period and the total pension benefits of the former relatively to the latter this effect increases the political support for social security among the low income young we show that in a political equilibrium of a two dimensional majoritarian election a voting majority of low income young and retirees supports a large welfare state the composition between public health and social security is determined by intermediate median income types who favor the contemporaneous existence of these two programs since public health increases their longevity enough to make social security more attractive technological improvements in health care strengthens this complementarity and lead to more welfare spending

did globalization restrict partisan politics an empirical evaluation of social expenditures in a panel of oecd countries this paper evaluates empirically how in the course of globalization partisan politics affected social expenditures in a panel of oecd countries i introduce an updated indicator of government ideology and investigate its interaction with the kof index of globalization two basic results emerge first at times when globalization proceeded at an average pace partisan politics had no effect on social expenditures but leftist governments increased social expenditures when globalization was proceeding rapidly second policies differed in the 1980s and 1990s leftist governments pursued expansionary policies in the 1980s yet partisan politics disappeared in the 1990s but not because of globalization

federalism and central bank independence the politics of german monetary policy 1957 92 two channels of political control allow elected politicians to influence monetary policy first political threats to the status structure or very existence of the central bank may force central bankers to comply with politically motivated demands on monetary policy second politicians may use their powers of appointment to ensure that central bank appointees share their electoral and party political goals this paper derives the monetary policy outcomes obtained as a function of the degree of central bank independence zero partial or full and central bankers types partisans or technocrats based on a case study of the 1957 and 1992 institutional changes to the german central banking system and a regression analysis covering the period in between i argue that the formal independence of the system is protected by its embeddedness in the institutions of german federalism and by the federalist components of its decentralized organizational structure the behavioral independence of the german central bank fluctuates over time with the party control of federalist veto points the bundesbank is staffed with nonpartisan technocrats who are partially insulated from political pressures

is german domestic social policy politically controversial this paper investigates empirically the influence of government ideology on social policy using german data examining the funding and the benefits of social security and public healthcare policy my results suggest that policies implemented by governments dominated by left and rightwing parties were similar over the 1951 2007 period leftwing governments however spent more in the 1970s and rightwing governments did so after german reunification in 1990 since policy convergence encourages new parties to enter the political arena and party platforms on social policy matters are likely to undergo further changes in light of demographic change the observed pattern may thus be a transitory phenomenon

partisan politics and public finance changes in public spending in the industrialized democracies 1955 1989 this paper evaluates the role that partisan politics plays in altering public spending levels the analysis covers over three decades of data on the developments of the public sectors in 16 oecd countries the results of the analysis lend firm support to the partisan politics model of special note is the distinction between the electorate and the government ideological preferences and the dominant role that the former plays the results also suggest contrary to conventional wisdom that partisan political influences have not been eliminated with the tightening of linkages to the international economy

the ethical context of entrepreneurship proposing and testing a developmental framework the aim of this study is to increase our understanding of the ethical climate of entrepreneurial firms as they grow and develop a developmental framework is introduced to describe the formal and informal ethical structures that emerge in entrepreneurial firms over time factors influencing where firms are within the developmental framework are posited including the entrepreneur s psychological profile lifecycle stage of the business and descriptive characteristics of the venture it is also proposed that the implementation of ethical structures will impact perceptions of the clarity and adequacy of the ethical standards of the firm and the firm s preparedness to deal with ethical challenges as they arise results are reported of a cross sectional survey of small firms at different stages of development the findings indicate the existence of four distinct clusters of firms based on their formal and informal ethical structures superlatives core proponents pain and gain and deficients evidence is also provided of statistically significant relationships between the proposed antecedent and outcome variables implications are drawn from the results and priorities are established for future research

partisan political business cycles in the german labour market empirical tests in the light of the lucas critique this paper focuses on alternative specifications ofpartisan political business cycles partisan theory rational partisan theory and hysteresis augmentedrpt it elaborates on analogies of the natural ratehypothesis underlying all specifications and thecointegration concept accordingly problems of thespecification of hypotheses estimation and inferencein a cointegrating framework with politicalinterventions are treated super exogeneity tests areshown to be equivalent to tests of the lucas critiqueand the rpt therefore the concept ofsuper exogeneity is transferred to empirical tests ofpartisan cycles by this a new testing framework ofpartisan cycles is developed and applied to germanlabour market data

election results and opportunistic policies a new test of the rational political business cycle model the literature on the rational pbc suggests that politicians systematically manipulate economic and fiscal conditions before elections to increase their chances of reelection most tests of this theory look for evidence of pre election distortions in fiscal policy we propose a new test that explores the two way interaction between the magnitude of the opportunistic distortion and the margin of victory the test is implemented using a large panel of portuguese municipalities the results show that opportunism leads to a larger win margin for the incumbent and that incumbents behave more opportunistically when their win margin is small these results are consistent with the theoretical model

political fragmentation party ideology and public expenditures in this paper we propose an original model of competition for effective political power between majority and opposition coalitions the model indicates that the electoral margin of the majority and the fragmentation of both coalitions are key variables that determine their effective political power we estimate the model in the case of the french departements our econometric results support the model and show that the per capita social expenditures in the french departements depend on the effective political power of the majority

how social security and medicare affect retirement behavior in a world of incomplete markets this paper provides an empirical analysis of how the u s social security and medicare insurance system affect the labor supply of older males in the presence of incomplete markets for loans annuities and health insurance we estimate a detailed dynamic programming dp model of the joint labor supply and social security acceptance decision focusing on a sample of males in the low to middle income brackets whose only pension is social security the dp model delivers a rich set of predictions about the dynamics of retirement behavior and comparisons of actual vs predicted behavior show that the dp model is able to account for wide variety of phenomena observed in the data including the pronounced peaks in the distribution of retirement ages at 62 and 65 the ages of early and normal eligibility for social security benefits respectively we identify a significant fraction of health insurance constrained individuals who have no form of retiree health insurance other than medicare and who can only obtain fairly priced private health insurance via their employer s group health plan the combination of significant individual risk aversion and a long tailed pareto distribution of health care expenditures implies that there is a significant security value for these individuals to remain employed until they are eligible for medicare coverage at age 65 overall our model suggests that a number of heretofore puzzling aspects of retirement behavior can be viewed as artifacts of particular details of the social security rules whose incentive effects are especially strong for lower income individuals and those who do not have access to fairly priced loans annuities and health insurance

does conservatism matter a time series approach to central bank behaviour empirical studies crediting independent and conservative central banks with lowering inflation and inflation volatility have been criticised for their focus on policy outcomes instead of policies and for their unsystematic conflation of independence and conservatism we present results from time series models for the german bundesbank that avoid these shortfalls conservatism matters in the following sense i more conservative bundesbank councils tend to react stronger to changes in inflation and output and ii an increase in conservatism leads to a more activist stabilisation policy this is in line with simple policy models incorporating economic persistence with implementation lags for monetary policy

money and majorities in the federal republic of germany evidence for a veto players model of government spending i formulate a veto players model of policy making by coalition government in the federal republic of germany the model gives testable predictions about how patterns of federal spending respond to changes in government some of the predictions are consistent with conventional wisdom namely that the spd fdp government decreased spending on right wing items when it came to power in 1969 and the return of cdu fdp coalition in 1982 produced a decline in leftwing spending other predictions are less intuitive for example there is no predicted increase in left wing spending associated with the spdfdp coalition and no increase in right wing spending with the cdu fdp government these predictions and those of competing models are tested using disaggregated budget data from fiscal years 1961 1989 controlling for category specific effects and economic conditions the data support the veto players model and this support is robust to a wide variety of plausible assumptions about the parties spending preferences

the impact of nearly universal insurance coverage on health care utilization evidence from medicare the onset of medicare eligibility at age 65 leads to sharp changes in the health insurance coverage of the u s population these changes lead to increases in the use of medical services with a pattern of gains across socioeconomic groups that varies by type of service while routine doctor visits increase more for groups that previously lacked insurance hospital admissions for relatively expensive procedures like bypass surgery and joint replacement increase more for previously insured groups that are more likely to have supplementary coverage after 65 reflecting the relative generosity of their combined insurance package under medicare