the american business cycle continuity and change in recent decades the american economy has experienced the worst peace time inflation in its history and the highest unemployment rate since the great depression these circumstances have prompted renewed interest in the concept of business cycles which joseph schumpeter suggested are like the beat of the heart of the essence of the organism that displays them in the american business cycle some of the most prominent macroeconomics in the united states focuses on the questions to what extent are business cycles propelled by external shocks how have post 1946 cycles differed from earlier cycles and what are the major factors that contribute to business cycles they extend their investigation in some areas as far back as 1875 to afford a deeper understanding of both economic history and the most recent economic fluctuations seven papers address specific aspects of economic activity consumption investment inventory change fiscal policy monetary behavior open economy and the labor market five papers focus on aggregate economic activity in a number of cases the papers present findings that challenge widely accepted models and assumptions in addition to its substantive findings the american business cycle includes an appendix containing both the first published history of the nber business cycle dating chronology and many previously unpublished historical data series

the impact of campaign expenditures on political competition in the french legislative elections of 1993 we use regression analysis to estimate the effect that campaign money had on the votes of challengers and incumbents in the 1993 elections to the french legislative assembly incumbent candidates can at best expect to win 1 01 of the popular vote for each extra franc they spend per registered voter in their district challengers can expect to win at least twice as much as this simulations show that if campaign spending ceilings were halved incumbents would have gained an extra ten percent of the popular vote over their closest challenging rivals the regression analysis also suggests that voters react negatively to candidates who rely heavily on their own money for their outlays and reward candidates who rely on contributions from private individuals these results suggest that campaign spending ceilings may inhibit political competition and that voters may resist a candidate who relies on narrow sources of funding

recruiting intensity during and after the great recession national and industry evidence we measure job filling rates and recruiting intensity per vacancy at the national and industry levels from january 2001 to september 2011 using data from the job openings and labor turnover survey construction makes up less than 5 percent of employment but accounts for more than 40 percent of the large swings in the job filling rate during and after the great recession leisure hospitality accounts for nearly a quarter of the large drop in recruiting intensity during the great recession we show that industry level movements in job filling rates and recruiting intensity are at odds with the implications of the standard matching function in labor search theory but consistent with a generalized function that incorporates an important role for recruiting intensity per vacancy

uncertainty and the timing of an urban congestion relief investment the no land case we analyze the impact of population uncertainty on the socially optimum timing of a congestion relief project in a linear monocentric city with fixed boundaries where congestion pricing cannot be implemented this project requires time to bear fruit but no urban land under certainty we show that utility maximization is roughly equivalent to a standard benefit cost analysis bca under uncertainty we derive an explicit optimal threshold for relieving congestion when the urban population follows a geometric brownian motion if the time to implement the project is short we show analytically that deciding on the timing of congestion relief based on a bca could lead to acting prematurely the reverse holds if project implementation is long and uncertainty is large enough

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

general economic conditions and national elections the fact that economic conditions influence voters is a leading commonplace of conversation in election years the question is is this fact in fact a fact despite the overwhelming popularity of the fact it has received neither an explicit theoretical analysis presumably because it is so obvious that economic adversity should create political adversaries nor until recently a satisfactory statistical analysis gerald h kramer has presented a multivariate analysis of congressional elections which would strongly suggest that fluctuations in the rate of unemployment have no appreciable effect upon elections but that fluctuations in per capita real income are influential in the following pages i propose to 1 reaffirm his finding on the electoral unimportance of ordinary fluctuations in unemployment 2 argue that contrary to kramer fluctuations in real income also do not have important electoral effects and 3 present an argument based upon rational voter behavior for the unimportance of general economic conditions in national elections

money politics and the post war business cycle abstract the political economy literature has enshrined as stylized fact the view that lower inflation and temporarily lower growth follow the election of republican presidents and has emphasized political manipulation of monetary policy as an explanation support for the monetary explanation comes in econometric work that largely ignores identification issues that dominate the literature on measuring the effects of monetary policy we generalize a standard vector autoregression framework to accommodate discrete political party variables we find almost no support for the view that political effects on the macroeconomy operate through monetary policy and only weak evidence that political effects are significant at all

can the president really affect economic growth presidential effort and the political business cycle presidential elections are often seen as referendums on the health of the economy however little evidence exists on the president s ability to influence gross domestic product gdp this study examines the effect of the incentive to be reelected and the resulting increase in presidential effort on gdp growth growth is found to rise in reelection years for first term presidents after 1932 and to fall in election years before 1932 when reelection was uncommon and for second term presidents generally this effect is largest for high quality presidents who probably have the highest return to effort and is spread across multiple sectors of the economy jel d78 d72 e32 j24

business cycle and political election outcomes evidence from the chilean democracy this paper explores the influence of economic variables in chilean presidential elections we use a panel where the dependent variable corresponds to the share of the vote obtained by the incumbent at a municipal level in the presidential elections of 1989 1993 and 1999 we focus on the unemployment rate and the output gap and find that both have a significant influence on the vote we also find that if the mayor is from the same coalition as the incumbent people will further punish the incumbent when regional unemployment is above national unemployment

using electoral cycles in police hiring to estimate the effect of police on crime comment previous empirical studies have uncovered little evidence that police reduce crime possibly due to simultaneity problems this paper uses the timing of mayoral and gubernatorial elections as an instrumental variable to identify a causal effect of police on crime increases in the size of police forces are shown to be disproportionately concentrated in mayoral and gubernatorial election years increases in police are shown to substantially reduce violent crime but have a smaller impact on property crime the null hypothesis that the marginal social benefit of reduced crime equals the costs of hiring additional police cannot be rejected

flexible pensions for politicians it may be difficult to motivate politicians in their last term to solve this problem we suggest a triple mechanism involving political information markets flexible pensions and democratic elections an information market is used to predict the potential reelection chances of the politician pensions depend on the price in the information market and thereby motivate the politician to act in a socially optimal manner we show that on balance the triple mechanism increases social welfare finally we suggest several ways to avoid the manipulation of information markets and we discuss possible pitfalls of flexible pensions

strategic public policy around population thresholds abstract political economists have long maintained that politicians respond to both re election and financial incentives this article contributes to the latter literature by analysing whether when and how local office holders respond to the economic incentives embedded in exogenously imposed population thresholds leading to an increased number and remuneration of local politicians building on insights from the urban economics and public finance literatures we argue that local politicians may strategically adjust fiscal and housing policies to stimulate in migration when approaching a population threshold where their remuneration increases using data from all 589 belgian municipalities over the period 1977 2016 our results confirm that approaching important population thresholds causes lower local tax rates and the granting of additional building permits particularly for apartments these policy changes occur early in the election cycle and at least for housing policy are restricted to incumbent mayors themselves expecting to benefit from crossing the population threshold

bread and peace voting in u s presidential elections a simple bread and peace model shows that aggregate votes forpresident in postwar elections were determined entirely byweighted average growth of real disposable personal income percapita during the incumbent party s term and the cumulativenumbers of american military personnel killed in action as aresult of u s intervention in the korean and vietnamese civilwars the model is subjected to robustness tests against twenty two variations in functional form inspired by the extensiveliterature on presidential voting not one of these variationsadds value to the bread and peace model or significantly perturbsits coefficients

voter turnout in us presidential elections does carville s law explain the time series we estimate a time series model of voter turnout for 34 us presidential elections 1880 2012 employing a variety of econometric techniques our major results are as follows 1 a negative and significant structural shift in voter turnout occurs in 1972 and is too large to be explained by the lowering of the voting age 2 the 1972 shift is the only statistically significant structural shift to occur since the first decade of the twentieth century 3 short term macroeconomic conditions significantly impact turnout with unemployment having a positive effect 4 turnout in recent presidential elections has not deviated significantly from the post 1972 norm 5 turnout is positively related to the expected closeness of the election outcome but contrary to some theoretical predictions closeness exhibits no trend over time

does job corps work impact findings from the national job corps study this paper presents findings from an experimental evaluation of job corps the nation s largest training program for disadvantaged youths the study uses survey data collected over four years and tax data over nine years on a nationwide sample of 15 400 treatments and controls the job corps model has promise program participation increases educational attainment reduces criminal activity and increases earnings for several postprogram years based on tax data however the earnings gains were not sustained except for the oldest participants nonetheless job corps is the only federal training program that has been shown to increase earnings for this population

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

a theory of political cycles abstract we study how the proximity of elections affects policy choices in a model in which policymakers want to improve their reputation to increase their reelection chances policymakers equilibrium decisions depend on both their reputation and the proximity of the next election typically incentives to influence election results are stronger closer to the election for a given reputation level as argued in the political cycles literature and these political cycles are less important when the policymaker s reputation is better our analysis sheds light on other agency relationships in which part of the compensation is decided upon infrequently

on the existence of a political monetary cycle this paper examines electoral influence on monetary policy as measured by ml money growth i find a significant four year electoral cycle in money growth even when controlling for the influence of interest rates income and budget deficits further the residual electoral cycle produces the income and inflation movements associated with the political business cycle when it is used in simulations of simple reduced form macro models the paper concludes by discussing the difficulties in rationalizing cyclical monetary policy with rational expectations

who suffers during recessions in this paper we examine how business cycles affect labor market outcomes in the united states we conduct a detailed analysis of how cycles affect outcomes differentially across persons of differing age education race and gender and we compare the cyclical sensitivity during the great recession to that in the early 1980s recession we present raw tabulations and estimate a state panel data model that leverages variation across u s states in the timing and severity of business cycles we find that the impacts of the great recession are not uniform across demographic groups and have been felt most strongly for men black and hispanic workers youth and low education workers these dramatic differences in the cyclicality across demographic groups are remarkably stable across three decades of time and throughout recessionary periods and expansionary periods for the 2007 recession these differences are largely explained by differences in exposure to cycles across industry occupation employment

how lasting is voter gratitude an analysis of the short and long term electoral returns to beneficial policy dominant theories of electoral behavior emphasize that voters myopically evaluate policy performance and that this shortsightednessmayobstructthewelfare improvingeffectofdemocraticaccountability however weknowlittleabouthow long governments receive electoral credit for beneficial policies we exploit the massive policy response to a major natural disaster the 2002 elbe flooding in germany to provide an upper bound for the short and long term electoral returns to targeted policy benefits we estimate that the flood response increased vote shares for the incumbent party by 7 percentage points in affected areas in the 2002 election twenty five percent of this short term reward carried over to the 2005 election before the gains vanished in the 2009 election we conclude that given favorable circumstances policy makers can generate voter gratitude that persists longer than scholarship has acknowledged so far and elaborate on the implications for theories of electoral behavior democratic accountability and public policy

voting and economic factors in french elections for the european parliament this article builds and estimates several econometric models that explain and forecast the outcomes of the french elections for the european parliament these models show the influence of the change in the local unemployment rate to explain the vote for the moderate left and the moderate right in the french elections for the european parliament these models appear to be accurate in forecasting the elections of the past and their behavior for the 2009 french election for the european parliament is satisfactory

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

informal job search and black youth unemployment in this paper i analyze how young black and white unemployed jobseekers use various methods of search and the employment outcomes which result from their use the focus is on distinguishing informal search methods i e friends and relatives or direct application without referral from more formal ones in analyzing racial differences the results show that the two informal methods of search account for about 90 of the difference in employment probabilities between white and black youth this also accounts for 57 71 of the difference in unemployment rates between the two furthermore most of these results reflect differences in the ability of these methods to generate job offers as opposed to differences in search effort or job acceptance rates however our ability to explain these differences through personal family and household characteristics was generally quite limited this abstract was borrowed from another version of this item

aspects of growth in a system of cities abstract this paper explores and develops the modeling of growth in a system of cities in two alternative settings first we examine a large growing economy with a fully developed system of cities with perfectly malleable private and public capital local scale economies in production and diseconomies in consumption in equilibrium offset each other at the margin so that from a national point of view we have a constant returns to scale economy we show that at the steady state the number of cities grows exponentially at the rate of growth of the population we then examine the impact of technological change considering a case where public capital is not perfectly malleable in the second setting we consider the problem of growth for a small economy and discuss problems associated with the transition to the steady state we modify the previous model to describe a system of cities that is just starting to develop investment in public infrastructure capital is subject to sharp indivisibilities and as a result new cities are built at discrete points in time

does the fed contribute to a political business cycle in contrast to findings of other studies evidence is presented to support the existence of a federal reserve induced political monetary cycle that corresponds to the u s presidential election cycle using various taylor rules we find support for the view that fed policy turns significantly more expansionary in the seven quarters prior to the election but only when the fed chair and incumbent presidential party have partisan affiliations

econometrics and presidential elections this paper discusses an econometric equation that explains votes for president as a function of economic events and incumbency information the history of the equation is reviewed the update after the 1992 election is discussed and a prediction for the 1996 election is made conditional on an economic forecast

evidence on discrimination in employment codes of color codes of gender there is substantial racial and gender disparity in the american economy as we will demonstrate discriminatory treatment within the labor market is a major cause of this inequality the evidence is ubiquitous careful research studies that estimate wage and employment regressions help wanted advertisements audit and correspondence studies and discrimination suits that are often reported by the news media yet there appear to have been periods of substantial reductions in economic disparity and discrimination for example donohue and heckman provide evidence that racial discrimination declined during 1965 1975 1 gottschalk has produced statistical estimates that indicate that discrimination against black males dropped most sharply between 1965 and 1975 and that discrimination against women declined during the interval 1973 1994 2 but some unanswered questions remain why did the movement toward racial equality stagnate and eventually decline after the mid 1970s what factors are most responsible for the remaining gender inequality what is the role of the competitive process in the elimination or reproduction of discrimination in employment

labor market analysis and labor policymaking in the nation s capital the author who served as chief economist checo at the u s department of labor in 2011 and 2012 discusses her work in the department and the nature of government policy making in the areas of labor and employment she lauds the extent to which policy making in the department is based on empirical evidence and economic analysis and says greater interaction between the department and academic economists who can provide such evidence and analysis would be beneficial she offers figures on the ongoing labor market effects of the 2008 financial crisis and ensuing recession and discusses the department s efforts to address problems including long term unemployment and the problems of african american and hispanic workers

political support for reforms economics of voting in transition countries i analyze the relationship between economics and politics across eight parliamentary elections in four transition countries the czech republic hungary poland and slovakia i argue that support for reform reflects the balance between positive and negative effects of the reform accordingly i identify economic groups that support or oppose the reform the former are private entrepreneurs white collar workers and university educated voters the latter are the unemployed retirees and blue collar and agricultural workers this general pattern holds both within countries and across countries and across tenures of different governments in contrast with the responsibility hypothesis voters in the transition countries are found to be forward looking not retrospective

an integrated test for electoral cycles in the u s economy this paper offers the first integrated test of the electoral model of business cycles the test begins with unrestricted estimates of presidential electoral patterns in u s economic outcomes real gnp unemployment and inflation and policies money growth and the adjusted budget surplus these estimates are then used to determine whether the estimated electoral patterns in macropolicy yield predicted electoral patterns for macro outcomes that are consistent with estimates of both actual electoral patterns in outcomes and voting behavior the results indicate that four year electoral cycles in macroeconomic outcomes and policies are strongly significant for the united states for the period 1951i to 1986ii copyright 1989 by mit press

is there a dead spot new evidence on fomc decisions before elections using new data that chronicle the fed s internal forecast of the output gap from 1973 to 1998 this paper tests for an electoral cycle in the decisions of the federal open market committee fomc the paper provides evidence of a dead spot in the committee s decisions before presidential elections for given values of these internal forecasts the fomc is less likely to decide to tighten monetary policy in the year preceding a presidential election than at other times

determinants of county level voting patterns in the 2012 and 2016 presidential elections county level data are used to estimate the incumbent party share of the two party vote in the 2012 and the 2016 u s presidential elections using a seemingly unrelated estimation procedure the r

partisan cycles in congressional elections and the macroeconomy in the postwar united states the president s party has always done worse in the midterm congressional elections than in the previous congressional election republican administrations exhibit below average and democratic administrations above average economic growth in the first half of each term whereas in the latter halves the two see equal growth our rational expectations model is consistent with these two regularities in presidential elections voters choose between two polarized candidates they then use midterm elections to counterbalance the president s policies by strengthening the opposition in congress since presidents of different parties are associated with different policies our model predicts a spurious correlation between the state of the economy and elections our predictions contrast with those of retrospective voting models in which voters reward the incumbent if the economy is doing well before the election our model performs empirically at least as well as and often better than alternative models

the spatial mismatch hypothesis what has the evidence shown this paper reviews 20 years worth of empirical evidence on the spatial mismatch hypothesis after briefly surveying the relevant models from urban and labour economics and recent trends in employment and population suburbanisation the empirical evidence on spatial effects is examined this literature includes evidence on the effects of residential segregation residential suburbanisation and employment suburbanisation and direct measures of access such as travel times the most recent evidence suggests that spatial mismatch is relevant for explaining black white employment differences though the magnitudes of these effects remain unclear

a reform dilemma in polarized democracies abstract we study the feasibility and efficiency of policy reforms in democracies we develop a simple election model where i reforms are costly for voters and politicians and these costs increase with the extent of policy change and ii politicians differ in their ability to carry out reforms efficiently we identify a so called reform dilemma which manifests itself in two variants from a static perspective low reform ability politicians are elected when political parties are polarized who then impose high costs on citizens for each reform step this property of elections arises as low reform ability is a substitute for policy commitment from a dynamic perspective incumbents may choose socially undesirable policies to align the social need for reform with their own reform ability and are thus re elected regardless of their reform ability

labor market effects of payroll taxes in developing countries evidence from colombia abstract we use a panel of manufacturing plants from colombia to analyze how the rise in payroll tax rates over the 1980s and 1990s affected the labor market our estimates indicate that formal wages fall by between 1 4 and 2 3 as a result of a 10 rise in payroll taxes this less than full shifting is likely to be the result of weak linkages between benefits and taxes and the presence of downward wage rigidities in colombia because the costs of taxation are only partly shifted from employers to employees employment also falls our results indicate that a 10 increase in payroll taxes lowered formal employment by between 4 and 5 in addition we find some evidence of less shifting and larger disemployment effects for production than for nonproduction workers these results suggest that policies aimed at boosting the relative demand of less skilled workers by reducing social security taxes may be effective in latin american countries where minimum wages bind and benefits are often not directly lin

are targeted wage subsidies harmful evidence from a wage voucher experiment this paper presents the results of a controlled experiment designed to test the effectiveness of a targeted wage subsidy program such programs are intended to increase the employment of target group workers by offering employers reimbursement for part of those workers wages in the dayton ohio experiment however job seekers given experimental vouchers identifying them to employers as eligible for a generous wage subsidy were significantly less likely to find employment than were job seekers without vouchers the author speculates that the vouchers had a stigmatizing effect and provided a screening device with which employers discriminated against economically disadvantaged workers

it s the economy and then some modeling the presidential vote with state panel data using data for the 50 us states for presidential elections from 1972 to 2004 two theories for determining state voting outcomes are considered jointly the economy matters and home grown ness theories fixed effects regressions show that measures of the economy matters real income unemployment and a proxy for inflation have the predicted effects on state voting patterns for presidential elections the home grown theory receives mixed support there is weak evidence that incumbent party candidates garner greater support in their home states there is strong support however for the proposition that incumbent party candidates fare worse in the home state of rival party candidates

is the political business cycle for real 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

political models of the business cycle should be revived political models of the business cycle have typically been ignored because they appear inconsistent with rational behavior and because empirical evidence is inconclusive this paper addresses the second issue demonstrating for u s real gnp unemployment and inflation that electoral cycles persistent patterns across electoral terms are significant but apparently only for republican incumbents and that partisan cycles persistent differences between parties are also significant these findings are consistent with the conjecture that a minority party is more constrained by electoral concerns whereas a majority party is freer to pursue partisan objectives

party cues in elections under multilevel governance theory and evidence from us states this is the authors accepted refereed and final manuscript to the article the final publication is available at www elsevier com

presidential elections and federal reserve policy an empirical test traditional macro economic models of federal reserve fed behavior typically assume that the fed enjoys a well defined objective function based on social welfare and generally predict counter cyclical monetary policy the increasing observation of procyclical monetary policy has led many researchers to investigate new models of fed behavior several recent papers imply that procyclical fed behavior is due to a lack of political accountability friedman 7 toma 23 and shughart and tollison 21 all attribute considerable bureaucratic discretion to the fed and seek to explain monetary policy by examining typical bureaucratic objectives other papers such as pierce 19 20 weintraub 26 and kane 10 11 argue that the fed operates in an arena filled with political constraints that cause sub optimal monetary policy but these constraints are not modeled explicitly one possible political constraint on fed behavior is the incumbent president s desire for re election in the political business cycle pbc literature presidential re election opportunities are enhanced by the production of a precise set of inflation and unemployment outcomes leading up to the election thus to the extent that presidents desire cyclical macro economic outcomes there will be executive pressure on the fed to create or accommodate such outcomes the effect this pressure will have on fed policy is ultimately an empirical question but most models deal with it by assumption traditional macro modeling assumes a zero effect while the pbc models implicitly assume that a favorable election cycle is a primary goal of all economic policymakers this paper examines presidential influence on the federal reserve by testing for an election cycle in money growth the major result is the identification of a regular 16 quarter cycle in money growth corresponding with presidential elections this cyclical effect is found to be stable over time and significant under a wide range of model specifications further when the cyclical component of money growth is used to simulate a simple macro model it produces a classic political business cycle in inflation and real output growth

politics and business cycles in industrial democracies politics alberto alesina influences from political competition on macroeconomic policy are often thought to be a source of economic fluctuations politicians are described as being driven by two not mutually exclusive main motivations they want to be reelected and they harbour political or ideological biases when such theories are confronted with actual cycles in a number of industrial countries the pattern of inflation unemployment output and budget deficits indicates that partisan policy making is a fairly widespread phenomenon with more limited evidence that electoral preoccupations result in major fluctuations the combination of partisanship and electoral cycles may easily result in socially undesirable outcomes in particular the degree of politico institutional stability and the independence of the central bank have a bearing on macroeconomic outcomes these observations raise a number of important questions about the design of political institutions

policy motivation and party differences in a dynamic spatial model of party competition we present a model of party competition that produces more realistic patterns of results than those often emphasized in the literature reversing downs 1957 we assume that parties win elections in order to formulate policies rather than formulate policies in order to win elections voters are modeled first as having perfect information about candidate positions and then under conditions of uncertainty in simulation experiments we show that policy motivation and voter uncertainty can bring about persistent and predictable party differences in sequential majority rule elections as the degree of voter certainty decreases parties diverge towards their optima whereas increases in voter certainty draw parties towards cycles in which party positions vary but predictable issue stances are maintained on the average

equilibrium and migration in dynamic models of housing markets abstract this paper presents a model of a regional housing market where households choose among competing employment opportunities offered by cities within a given system the equilibrium requirement imposed in the model requires that households be indifferent among all locations both within their current city and other cities within the region rather than in terms of exogenously determined utility or populations this construction allows the characterization of equilibrium in terms of potentially observable variables related to household income given that equilibrium can be defined in this more general manner it is natural to identify ways in which the predictions will differ from those generated by existing models capozza and helsley s j urban econ 28 1990 180 203 model of land conversion is evaluated in this context in this setting the option value associated with the ability to delay development depends directly on the degree to which the income processes are correlated across cities also increased idiosyncratic income risk does not necessarily lead to larger option values

government subsidies and presidential election outcomes evidence for a developing country summary we explore the effects of government subsidies on presidential elections in chile in 1989 99 we use a panel with three periods the elections of 1989 1993 and 1999 and 229 counties we correct for the potential simultaneity problem deriving from the fact that an incumbent facing a difficult political scenario might react by increasing subsidies to improve his her electoral performance our results indicate that the greater the coverage of these types of programs i e the percentage of people receiving subsidies the higher the votes for the incumbent

politics at the water s edge parties voters and the use of force abroad this article examines the effects of party politics and presidential election cycles on u s recourse to force abroad i analyze a game theoretic model to generate predictions about these effects in the unique time consistent equilibrium outcome of the one shot game policy varies across political parties in a subgame perfect equilibrium outcome of the repeated game the use of force is invariant to the partisan composition of government in neither case does policy respond to the electoral cycle an empirical analysis supports the predictions of the repeated game between 1870 and 1992 u s recourse to force abroad responds neither to partisan politics nor to the domestic political calendar it responds only to changes in u s power status and to the advent of general wars

information and efficiency in political stock markets using computerized markets to predict election results this study concentrates on four computerized political markets in germany between 1990 and 1998 while this new method for the prediction of election events worked quite well in the usa it did not perform as well in germany searching for the causes of this distinction it is shown that in contrast to the findings of forsythe et al 1992 i extraordinary profits were achieved less by people who took advantage of other people s anomalies than by those people who acquired an advantage from the existence of asymmetric information ii the marginal trader hypothesis does not hold when applied to german markets and that iii traders relied on public opinion polls it is argued that these distinctions are caused by the differences in the german and the us voting systems additionally it is shown that to a certain extent iv election markets were able to predict the contemporary mood of the electorate without the help of public opinion polls v first of all the informed traders used public opinion pol