Macroeconomic Policy and Public Choice
Macroeconomic Policy and Public Choice By Professor David Kiefer (auth.)
1997 | 275 Pages | ISBN: 3540648720 | PDF | 16 MB
1997 | 275 Pages | ISBN: 3540648720 | PDF | 16 MB
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.