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Partisan Political Business Cycles in the German Labour Market? Empirical Tests in the Light of the Lucas-Critique

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  • Belke, Ansgar

Abstract

This paper focuses on alternative specifications of partisan political business cycles (Partisan Theory, Rational Partisan Theory and hysteresis-augmented RPT). It elaborates on analogies of the natural rate hypothesis underlying all specifications and the cointegration concept. Accordingly, problems of the specification of hypotheses, estimation and inference in a cointegrating framework with political interventions are treated. Super-exogeneity tests are shown to be equivalent to tests of the Lucas-critique and the RPT. Therefore, the concept of super-exogeneity is transferred to empirical tests of partisan cycles. By this, a new testing framework of partisan cycles is developed and applied to German labour market data. Copyright 2000 by Kluwer Academic Publishers

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  • Belke, Ansgar, 2000. "Partisan Political Business Cycles in the German Labour Market? Empirical Tests in the Light of the Lucas-Critique," Public Choice, Springer, vol. 104(3-4), pages 225-283, September.
    • Handle: RePEc:kap:pubcho:v:104:y:2000:i:3-4:p:225-83
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