NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Political Parties and the Business Cycle in the United States, 1948-1984

Alberto Alesina, Jeffrey Sachs

NBER Working Paper No. 1940
Issued in May 1986
NBER Program(s):   EFG

This paper tests the existence and the extent of a politically

induced business cycle in the U.S. in the post-World War II period. The

cycle described in this paper is different from the traditional

"political business cycle" of Nordhaus. It is based on a systematic

difference between the monetary policies of the two parties in a model

with labor contracts. From an explicit optimization problem we derive a

system of equations for output and money growth. Then we successfully

test the non-linear restriction imposed by the theory on the parameters

of the system of equations. We cannot reject the hypothesis that money

growth has been systematically different under the two types of

administration and that this difference contributes to explain output

fluctuations.

download in pdf format
   (249 K)

email paper

This paper is available as PDF (249 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Alesina, Alberto and Jeffrey Sachs, "Political Parties and the Business Cycle in the United States, 1948-1984." Journal of Money Credit and Banking, Vol. 20, No. 1, February 1988, pp. 63-82.

Users who downloaded this paper also downloaded these:
Drazen The Political Business Cycle After 25 Years
Rogoff w2428 Equilibrium Political Budget Cycles
Alesina and Roubini w3478 Political Cycles in OECD Economies
Alesina Macroeconomics and Politics
Rogoff and Sibert w1838 Elections and Macroeconomic Policy Cycles
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us