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 point. An extension of new Keynesian theory provides a model of endogenous stabilization in which the government practices short-run stabilization policy which dampens the impact of exogenous shocks. This is a situation in which rational voters favor discretionary policy over a fixed policy rule even with rational economic agents. Special attention is given to the relevant data and to the possibilities of hypothesis testing.
| Author: David Kiefer |
| Publisher: Springer |
| Publication Date: Nov 18, 1998 |
| Number of Pages: 275 pages |
| Binding: Paperback or Softback |
| ISBN-10: 3540648720 |
| ISBN-13: 9783540648727 |
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