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Partisan differences in Swedish macroeconomic policy

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  • Erlandsson, Mattias

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

The purpose of this paper is to trace partisan differences among Swedish governments during the period 1958-1998. 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 rightwing 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

  • Erlandsson, Mattias, 2001. "Partisan differences in Swedish macroeconomic policy," Working Papers in Economics 78, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0078
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    File URL: http://hdl.handle.net/2077/2843
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    References listed on IDEAS

    as
    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. 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.
    3. Hibbs, Douglas Jr., 1992. "Partisan theory after fifteen years," European Journal of Political Economy, Elsevier, vol. 8(3), pages 361-373, October.
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    More about this item

    Keywords

    Political economics; partisanship; macroeconomic policy;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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