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What if Output Persistence is Disregarded by an Opportunistic Incumbent?

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  • António Bento Caleiro

Abstract

This note presents the consequences of output persistence being disregarded by an electorally motivated incumbent. In this case, incumbent’s policies are suboptimal not only socially but also from the electoral point of view.

Suggested Citation

  • António Bento Caleiro, 2014. "What if Output Persistence is Disregarded by an Opportunistic Incumbent?," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 4(4), pages 803-803.
    • Handle: RePEc:ers:ijfirm:v:4:y:2014:i:4:p:803
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    References listed on IDEAS

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    1. Lockwood, Ben, 1997. "State-Contingent Inflation Contracts and Unemployment Persistence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 29(3), pages 286-299, August.
    2. Svensson, Lars E O, 1997. "Optimal Inflation Targets, "Conservative" Central Banks, and Linear Inflation Contracts," American Economic Review, American Economic Association, vol. 87(1), pages 98-114, March.
    3. Antonio Caleiro, 2012. "Output Persistence in Portugal," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 2(3), pages 206-206.
    4. Gregory C. Chow, 1977. "Usefulness of Imperfect Models for the Formulation of Stabilization Policies," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 6, number 2, pages 175-187, National Bureau of Economic Research, Inc.
    5. Caleiro, António, 2009. "How upside down are political business cycles when there is output persistence," Research in Economics, Elsevier, vol. 63(1), pages 22-26, March.
    6. Jonsson, Gunnar, 1997. "Monetary politics and unemployment persistence," Journal of Monetary Economics, Elsevier, vol. 39(2), pages 303-325, July.
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