Partisan Politics, Divided Government, and the Economy [Paperback]

Integrates economics and politics, theory and econometrics, to provide the first coherent and general formal model of US political economy.Exploring how the political process in the United States influences the economy and how economic conditions influence electoral results, this text explains how the interaction between the President and Congress lead to the formulation of macroeconomic policy.Exploring how the political process in the United States influences the economy and how economic conditions influence electoral results, this text explains how the interaction between the President and Congress lead to the formulation of macroeconomic policy.This book explores how the political process in the United States influences the economy and how economic conditions influence electoral results. It explains how the interaction between the President and Congress lead to the formulation of macroeconomic policy and how the American voters achieve moderation by balancing the two institutions. Fluctuations in economic growth are shown to depend on the results of elections and, conversely, electoral results to depend on the state of the economy. The final chapter of the book establishes striking similarities between the American political economy and other industrial democracies.1. Introduction; 2. Models of policy divergence; 3. A theory of institutional balancing; 4. The midterm cycle; 5. Diversity, persistence, and mobility; 6. Incumbency and moderation; 7. Partisan business cycles; 8. The President, Congress, and the economy; 9. Economic growth and national elections in the United States: 191588; 10. Partisan economic policy and divided government in parliamentary democracies. ...a challenging and important work...in this key area of interdisciplinary research, Alesina and Rosenthal's multi-faceted formal arguments and empirical tests are likely to set the standard for many years. Keith Krehbiel, Stanford University Alesina and Rosenthal bring together two major themelÃ1