Business Cycles and the Political Process

The interrelationship between the political sector and the macroeconomy in democratic societies has been examined extensively in recent years. Research in this area has generally been concerned with two issues. First, following the lead of Kramer [16], various authors have examined the impact of economic conditions on Congressional [1; 13; 21; 24] and Presidential elections [4; 5]. The results at the Congressional level have been mixed, but it is reasonably safe to conclude that economic conditions do affect Presidential elections. The second issue, and the one of primary concern in this study, has dealt with the development of models of politico-economic interaction