Macroeconomic Policy and Public Choice
ISBN:
978-3-540-64872-7
Auflage:
Softcover reprint of the original 1st ed. 1997
Verlag:
Springer, Springer Berlin
Land des Verlags:
Deutschland
Erscheinungsdatum:
18.11.1998
Format:
Softcover
Seitenanzahl:
275
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Subject of this book is the intersection between political science and macroeconomics. The central idea is the existence of a political economic equilibrium in which the government acts to dampen the business cycle. The election cycle implies that this equilibrium may be a cycle rather than a point. An extension of new Keynesian theory provides a model of endogenous stabilization in which the government practices short-run stabilization policy which dampens the impact of exogenous shocks. This is a situation in which rational voters favor discretionary policy over a fixed policy rule even with rational economic agents. Special attention is given to the relevant data and to the possibilities of hypothesis testing.
