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Partisan Differences in Swedish Macroeconomic Policy

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  • Mattias Erlandsson

Abstract

The purpose of this paper is to trace partisan differences among Swedish governments during the period 1958-2000. According to the Partisan Theory of macroeconomic policy left-wing governments are relatively more concerned with the performance of the real side of the economy (real output and unemployment) as compared to right-wing governments, that place a higher weight on the nominal variables (inflation). Left-wing governments would therefore pursue more expansionary aggregate demand policy, and thereby be willing to risk a higher inflation, in order to improve real economic performance. In this paper we apply the model developed in Hibbs (1994) on Swedish data. Our empirical results support the partisan theory, showing that, ceteris paribus, aggregate demand policy under left-wing governments is relatively more expansionary than under right-wing governments, even if the expansionary policy sometimes leads to higher inflation.

Suggested Citation

  • Mattias Erlandsson, 2004. "Partisan Differences in Swedish Macroeconomic Policy," Public Choice, Springer, vol. 120(1_2), pages 205-220, July.
    • Handle: RePEc:kap:pubcho:v:120:y:2004:i:1_2:p:205-220
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    References listed on IDEAS

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    1. Ohlsson, Henry & Vredin, Anders, 1996. " Political Cycles and Cyclical Policies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 98(2), pages 203-218, June.
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    2. J Stephen Ferris & Soo-Bin Park & Stanley L. Winer, 2006. "Political Competition and Convergence to Fundamentals: With Application to the Political Business Cycle and the Size of Government," CESifo Working Paper Series 1646, CESifo.
    3. J. Stephen Ferris & Soo-Bin Park & Stanley L. Winer, 2005. "Political Competition and Convergence to Fundamentals: With Application to the Politcal Business Cycle and the Size of the Public Sector," Carleton Economic Papers 05-09, Carleton University, Department of Economics.

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