Economics and politics in the United States: A state-level investigation

Chun Ping Chang, Yoonbai Kim, Yung hsiang Ying

    Research output: Contribution to journalArticlepeer-review

    8 Citations (Scopus)

    Abstract

    We examine state income and government spending data to investigate the role of political parties and elections in state business cycles of the United States, and find strong support for the partisan political business cycles, both traditional and rational versions. The growth rate of per capita real income and government spending tend to be higher (lower) with a Democratic (Republican) governor as well as a Democratic (Republican) president. In case of economic growth, we find some evidence for opportunistic cycles induced by national level politics; meanwhile, both national and state governments seem to generate expansionary policy in election years.

    Original languageEnglish
    Pages (from-to)343-354
    Number of pages12
    JournalJournal of Economic Policy Reform
    Volume12
    Issue number4
    DOIs
    Publication statusPublished - 2009 Dec 25

    Keywords

    • Political business cycle
    • State level

    ASJC Scopus subject areas

    • Business and International Management
    • Economics, Econometrics and Finance(all)

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