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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. Hibbs, Douglas A., 1977. "Political Parties and Macroeconomic Policy," American Political Science Review, Cambridge University Press, vol. 71(4), pages 1467-1487, December.
    2. Goncalves Veiga, Linda & Chappell, Henry W, Jr, 2002. "Politics and Unemployment in Industrialized Democracies," Public Choice, Springer, vol. 110(3-4), pages 261-282, March.
    3. Douglas A. Hibbs, 1994. "The Partisan Model Of Macroeconomic Cycles: More Theory And Evidence For The United States," Economics and Politics, Wiley Blackwell, vol. 6(1), pages 1-23, March.
    4. Alberto Alesina & Nouriel Roubini & Gerald D. Cohen, 1997. "Political Cycles and the Macroeconomy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262510944, April.
    5. Fredrik Carlsen, 1998. "Rational Partisan Theory: Empirical Evidence for the United States," Southern Economic Journal, John Wiley & Sons, vol. 65(1), pages 64-82, July.
    6. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-334, June.
    7. David Kiefer, 2000. "Activist Macroeconomic Policy, Election Effects and the Formation of Expectations: Evidence from OECD Economies," Economics and Politics, Wiley Blackwell, vol. 12(2), pages 137-154, July.
    8. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    9. repec:bla:scandj:v:98:y:1996:i:2:p:203-18 is not listed on IDEAS
    10. Fredrik Carlsen & Elin F. Pedersen, 1999. "Rational Partisan Theory: Evidence for Seven OECD Economies," Economics and Politics, Wiley Blackwell, vol. 11(1), pages 13-32, March.
    11. Chappell, Henry W, Jr & Keech, William R, 1986. "Party Differences in Macroeconomic Policies and Outcomes," American Economic Review, American Economic Association, vol. 76(2), pages 71-74, May.
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    Cited by:

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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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