The political cycle and the mexican economy

The purpose of this dissertation is to measure the influence of the political cycle in the Mexican economy, both at the national and subnational levels. Under the general framework of the political business cycle theory, and one of its variants, the political budget cycle, the influence of political cycles on economic activity are analyzed, as well as on aggregate demand, public expenditures and the exchange rate, at the national level, and public expenditure at subnational (state) level. The methodologies used are autoregressive models with dummy variables in the national case and panel data analysis with dummy variables in the subnational case. The period of analysis goes form 1934 to the present, according to the availability of information. At national level, evidence of significant influence of the political cycle is found in the general economic activity, sectoral activity, aggregate demand, public expenditures and the real exchange rate. At a state level, there is a significant increase in public expenditures in election years, as well as an increase in public wages in the years following elections. In the final chapters of the dissertation, the comparison of the results with those obtained in former research is discussed , and, finally some conclusions and lines of research are identifie