TY  - JOUR
AU  - Alesina,Alberto
AU  - Sachs,Jeffrey
TI  - Political Parties and the Business Cycle in the United States, 1948-1984
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1940
PY  - 1986
Y2  - May 1986
UR  - http://www.nber.org/papers/w1940
L1  - http://www.nber.org/papers/w1940.pdf
N1  - Author contact info:
Alberto F. Alesina
Department of Economics
Harvard University
Littauer Center 210
Cambridge, MA 02138
Tel: 617/495-8388
Fax: 617/495-7730
E-Mail: aalesina@harvard.edu

Jeffrey D. Sachs
The Earth Institute at Columbia University
314 Low Library
535 West 116th Street, MC 4327
New York, NY  10027
Tel: 212/854-8704
Fax: 212/854-8702
E-Mail: sachs@columbia.edu
M2  - featured in NBER digest on 1986-09-01
AB  - 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.
ER  -