| Title: | Policy
Makers' Preferences, Party Ideology and the Political Business Cycle* |
| Number: | 03-19 |
| Author: | Stefan Krause and Fabio Méndez |
| Issue Date: | October 2003 (revised, August 2004) |
| Abstract: | We generate a time-series of relative preferences of policy
makers
for inflation stability using a sample of 24 countries in order to
study
the behavior of political parties. Such behavior is essential in both
the
partisan cycle models and the opportunistic political cycle analysis. Our evidence tends to support the partisan view, with right-wing parties exhibiting a higher preference towards stabilizing inflation than left-wing parties, while obtaining mixed results on the opportunistic behavior of incumbent parties. Finally, when we analyze the behavior of separate ideologies, we find overwhelming support of party resemblance on election year and evidence favoring an opportunistic conduct by right-wing parties. |
* Southern Economic Journal, forthcoming
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