IDEAS home Printed from https://ideas.repec.org/a/wly/jmoncb/v44y2012i2-3p385-399.html
   My bibliography  Save this article

The Political Business Cycle: New Evidence from the Nixon Tapes

Author

Listed:
  • BURTON A. ABRAMS
  • JAMES L. BUTKIEWICZ

Abstract

Drawing from the personal tape recordings made during the presidency of Richard Nixon, we uncover and report in this paper new evidence that Nixon manipulated Arthur Burns and the Federal Reserve Bank into creating a political business cycle that helped secure Nixon's reelection victory in 1972. Nixon understood the risks that his desired monetary policy imposed but chose to trade longer‐term economic costs to the economy for his own short‐term political benefit.

Suggested Citation

  • Burton A. Abrams & James L. Butkiewicz, 2012. "The Political Business Cycle: New Evidence from the Nixon Tapes," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 44(2‐3), pages 385-399, March.
    • Handle: RePEc:wly:jmoncb:v:44:y:2012:i:2-3:p:385-399
    DOI: 10.1111/j.1538-4616.2011.00492.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1538-4616.2011.00492.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1538-4616.2011.00492.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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, December.
    2. Kozicki, Sharon & Tinsley, P.A., 2009. "Perhaps the 1970s FOMC did what it said it did," Journal of Monetary Economics, Elsevier, vol. 56(6), pages 842-855, September.
    3. Burton A. Abrams, 2006. "How Richard Nixon Pressured Arthur Burns: Evidence from the Nixon Tapes," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 177-188, Fall.
    4. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Hack, Lukas & Istrefi, Klodiana & Meier, Matthias, 2023. "Identification of Systematic Monetary Policy," CEPR Discussion Papers 17999, C.E.P.R. Discussion Papers.
    2. Chiu, Eric M.P., 2020. "Reexamining the Macroeconomic Policy Cycle in Taiwan: Evidence from the Central Bank’s Monetary Reaction Function," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 61(2), pages 89-110, December.
    3. Burton A. Abrams & James L. Butkiewicz, 2017. "The political economy of wage and price controls: evidence from the Nixon tapes," Public Choice, Springer, vol. 170(1), pages 63-78, January.
    4. Funashima, Yoshito, 2015. "The Fed-Induced Political Business Cycle," MPRA Paper 63654, University Library of Munich, Germany.
    5. Funashima, Yoshito, 2016. "The Fed-induced political business cycle: Empirical evidence from a time–frequency view," Economic Modelling, Elsevier, vol. 54(C), pages 402-411.
    6. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Post-Print hal-01291401, HAL.
    7. James L. Butkiewicz & Scott Ohlmacher, 2021. "Ending Bretton Woods: evidence from the Nixon tapes," Economic History Review, Economic History Society, vol. 74(4), pages 922-945, November.
    8. Sonan Memon, 2022. "Inflation in Pakistan: High-Frequency Estimation and Forecasting," PIDE-Working Papers 2022:12, Pakistan Institute of Development Economics.
    9. Eric Dubois, 2016. "Political business cycles 40 years after Nordhaus," Public Choice, Springer, vol. 166(1), pages 235-259, January.
    10. Andrew Bossie, 2013. "The Effect of Fiscal Policy Shocks on the Flow of Funds," 2013 Papers pbo741, Job Market Papers.
    11. Alexander Dentler, 2019. "Did the fed raise interest rates before elections?," Public Choice, Springer, vol. 181(3), pages 239-273, December.
    12. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.
    13. Bodea, Cristina & Kerner, Andrew, 2022. "Fear of inflation and gender representation in central banking," European Journal of Political Economy, Elsevier, vol. 74(C).
    14. Simon Bilo & Richard Wagner, 2015. "Neutral money: Historical fact or analytical artifact?," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 28(2), pages 139-150, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01291401, HAL.
    2. Fabio Milani, 2010. "Political Business Cycles In The New Keynesian Model," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 896-915, October.
    3. Burton A. Abrams & James L. Butkiewicz, 2017. "The political economy of wage and price controls: evidence from the Nixon tapes," Public Choice, Springer, vol. 170(1), pages 63-78, January.
    4. J. Stephen Ferris & Marcel-Cristian Voia, 2011. "Does the expectation or realization of a federal election precipitate Canadian output growth?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(1), pages 107-132, February.
    5. Eric Dubois, 2016. "Political business cycles 40 years after Nordhaus," Public Choice, Springer, vol. 166(1), pages 235-259, January.
    6. Alexander Dentler, 2019. "Did the fed raise interest rates before elections?," Public Choice, Springer, vol. 181(3), pages 239-273, December.
    7. Eric Dubois, 2016. "Political Business Cycles 40 Years after Nordhaus," Post-Print hal-01291401, HAL.
    8. Blomberg, S. Brock & Hess, Gregory D., 2003. "Is the political business cycle for real?," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1091-1121, May.
    9. Josef Brechler & Adam Geršl, 2014. "Political legislation cycle in the Czech Republic," Constitutional Political Economy, Springer, vol. 25(2), pages 137-153, June.
    10. Thanh C. Nguyen & Vítor Castro & Justine Wood, 2022. "Political environment and financial crises," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(1), pages 417-438, January.
    11. Vítor Castro & Rodrigo Martins, 2015. "Budget, expenditures composition and political manipulation: Evidence from Portugal," NIPE Working Papers 4/2015, NIPE - Universidade do Minho.
    12. Cesar Alberto Campos Coelho & Francisco José Veiga & Linda Gonçalves Veiga, 2005. "Political Business Cycles in Local Employment," NIPE Working Papers 13/2005, NIPE - Universidade do Minho.
    13. Stein, Ernesto H. & Streb, Jorge M., 2004. "Elections and the timing of devaluations," Journal of International Economics, Elsevier, vol. 63(1), pages 119-145, May.
    14. Jorge M. Streb & Daniel Lema & Gustavo Torrens, 2009. "Checks and Balances on Political Budget Cycles: Cross‐Country Evidence," Kyklos, Wiley Blackwell, vol. 62(3), pages 426-447, August.
    15. Michał Mackiewicz, 2006. "Przyczyny deficytu finansów publicznych w świetle nowej ekonomii politycznej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 1-22.
    16. Juan Carlos Berganza, 1998. "Relationships Between Politicians and Voters Through Elections: A Review Essay," Working Papers wp1998_9809, CEMFI.
    17. François Facchini & Mickaël Melki, 2012. "Political Ideology and Economic Growth in a Democracy: The French Experience, 1871 - 2009," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00662838, HAL.
    18. Vergne, Clémence, 2009. "Democracy, elections and allocation of public expenditures in developing countries," European Journal of Political Economy, Elsevier, vol. 25(1), pages 63-77, March.
    19. Oriola, Hugo, 2023. "Political monetary cycles: An empirical study," European Journal of Political Economy, Elsevier, vol. 79(C).
    20. Ilker Domaç & Eray M. Yücel, 2005. "What Triggers Inflation in Emerging Market Economies?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 141(1), pages 141-164, April.

    More about this item

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jmoncb:v:44:y:2012:i:2-3:p:385-399. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.