Macroeconomic Policy and Public Choice

Kiefer, David

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.

Details

Published by: Springer

Publication Date: 1998-11-18

Format: Paperback

ISBN-13: 9783540648727

DOI: 10.1007/978-3-642-60564-2

Dimensions: 235cm x155cm

Pages: 275