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Political business cycles in post-communist European countries

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journal contribution
posted on 07.10.2021, 13:26 by Abdullo Pulatov, Ahmad Hassan AhmadAhmad Hassan Ahmad
This paper analyses political business cycles in ten former European communist countries. The dataset used covers the period 1990-2018. The results show that the political business cycle (PBCs) manifests itself in these countries through both fiscal and monetary policy. Changes in government expenditure during election times are found to be significant in reducing unemployment. Hence, it signals there is a politically driven fiscal expansion. The results also show the importance of institutional quality in reducing the effects of the PBCs. The monetary policy models indicate that changes in money stock during and around election times affects the unemployment rate. Undertaking a sub-sample analysis of the non-EU and EU members highlights the case that membership of the EU is an important factor in preventing the development of PBCs.

History

School

  • Business and Economics

Department

  • Economics

Published in

Politics and Policy

Volume

49

Issue

5

Pages

1248-1269

Publisher

Wiley

Version

VoR (Version of Record)

Rights holder

© The authors

Publisher statement

This is an Open Access Article. It is published by Wiley under the Creative Commons Attribution 4.0 Unported Licence (CC BY). Full details of this licence are available at: http://creativecommons.org/licenses/by/4.0/

Acceptance date

15/12/2020

Publication date

2021-07-02

Copyright date

2021

ISSN

1555-5623

eISSN

1747-1346

Language

en

Depositor

Dr Ahmad Hassan Ahmad. Deposit date: 2 June 2021