Political Dimensions of the American Macroeconomy, 2nd Edition

CHAPTER 8

Evidence of Electoral and Partisan Cycles

Introduction

The partisan and electoral cycle effects are a source of macroeconomic instability. The two PBC effects exacerbate the up-and-down swings of the business cycle. This chapter examines the pattern of inflation and unemployment in the U.S. economy for evidence of electoral and partisan effects during Democratic and Republican presidencies across the time frame from 1961 to 2016. As discussed in Chapter 6, the electoral cycle refers to incumbent manipulation of the economy prior to an election as a tactic to increase presidential reelection votes (Nordhaus 1975; Nordhaus, Alesina, and Schultze 1989). The partisan effect, as discussed in Chapter 7, refers to incumbent manipulation of ...