The Fed-induced political business cycle: Empirical evidence from a time–frequency view

2016 ◽  
Vol 54 ◽  
pp. 402-411 ◽  
Author(s):  
Yoshito Funashima
Keyword(s):  
Business Cycle ◽  
Empirical Evidence ◽  
Political Business Cycle ◽  
Time Frequency

Political Business Cycles and Russian Elections, or the Manipulations of ‘Chudar’

2001 ◽  
Vol 31 (2) ◽  
pp. 225-246 ◽  
Author(s):  
DANIEL TREISMAN ◽  
VLADIMIR GIMPELSON
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Empirical Evidence ◽  
Policy Instrument ◽  
Political Business Cycle ◽  
Political Business Cycles ◽  
Policy Makers

Political business cycle theories tend to focus on one policy instrument or macroeconomic lever at a time. Efforts to find empirical evidence of opportunistic business cycles have turned up rather meagre results. We suggest that these facts may be related. If ways of manipulating the economy to win votes are thought of as substitutes, with changing relative costs, one would expect rational policy makers to switch between them in different periods as costs change. We illustrate this argument with a discussion of Russia. In Russia, four nationwide votes have been held since 1993. We deduce the set of policies that a rational, behind-the-scenes strategist – the ‘Chudar’ of the title – would recommend to an incumbent who believes the voters to vote retrospectively. We show that the expectations are borne out closely in the actual macroeconomic data.

scholarly journals News-Driven Business Cycles: Insights and Challenges

2014 ◽  
Vol 52 (4) ◽  
pp. 993-1074 ◽  
Author(s):  
Paul Beaudry ◽  
Franck Portier
Keyword(s):  
Business Cycles ◽  
Business Cycle ◽  
Empirical Evidence ◽  
Economic Fluctuations ◽  
Aggregate Fluctuations ◽  
Business Cycle Fluctuations ◽  
Widespread Belief ◽  
Way Of Thinking ◽  
The Many

There is a widespread belief that changes in expectations may be an important independent driver of economic fluctuations. The news view of business cycles offers a formalization of this perspective. In this paper we discuss mechanisms by which changes in agents' information, due to the arrival of news, can cause business cycle fluctuations driven by expectational change, and we review the empirical evidence aimed at evaluating their relevance. In particular, we highlight how the literature on news and business cycles offers a coherent way of thinking about aggregate fluctuations, while at the same time we emphasize the many challenges that must be addressed before a proper assessment of the role of news in business cycles can be established. (JEL D83, D84, E13, E32, O33)

scholarly journals Firing costs in a business cycle model with endogenous separations

2015 ◽  
Vol 42 (3) ◽  
pp. 499-518
Author(s):  
Dennis Wesselbaum
Keyword(s):  
Business Cycle ◽  
Empirical Evidence ◽  
Employment Protection ◽  
Cycle Model ◽  
Beveridge Curve ◽  
Flow Rates ◽  
Content Type ◽  
Firing Costs ◽  
Cross Country ◽  
Business Cycle Model

Purpose – The purpose of this paper is to introduce productivity-dependent firing costs into an otherwise standard endogenous separations matching model. The authors suggest an alternative to the standard fix cost approach and account for empirical evidence emphasizing that firing costs vary across workers. The authors show that the model with firing costs outperformes the model without firing costs and replicates the empirical facts fairly well. Furthermore, the authors present cross-country evidence that countries with stricter employment protection have a weaker Beveridge curve relation and surprisingly more volatile job flow rates. Design/methodology/approach – The authors begin the analysis at the intersection of labor and product markets. For this purpose, the authors derive a real business cycle model with search and matching frictions and endogenous separations. The authors enrich this set-up by introducing productivity-dependent firing costs. Findings – The authors show that the model with firing costs outperformes the model without firing costs and replicates the empirical facts fairly well. Furthermore, the authors present cross-country evidence that countries with stricter employment protection have a weaker Beveridge curve relation and surprisingly more volatile job flow rates. Originality/value – This paper introduces productivity-dependent firing costs into an otherwise standard endogenous separations matching model. The authors suggest an alternative to the standard fix cost approach and account for empirical evidence emphasizing that firing costs vary across workers. The authors show that the model with firing costs outperformes the model without firing costs and replicates the empirical facts fairly well. Furthermore, the authors present cross-country evidence that countries with stricter employment protection have a weaker Beveridge curve relation and surprisingly more volatile job flow rates.

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