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This paper tests whether politically connected firms in Putin’s Russia are a channel for the political business cycle. Given the widespread corruption and crony capitalism that exists in Russia, it is likely that federal and regional politicians may need to buy the electoral support of powerful, connected firms in order to win elections. Using panel data of approximately 60,000 Russian firms comprising an estimated 62 percent of GDP per year from 2003-2011, I find that federally connected firms are significantly more productive in federal election years. If these cycles in firm productivity are caused by electoral favors from politicians, this not only further corrupts Russia’s political landscape, but it also may induce powerful firms to engage in costly political bidding wars for these connections, thus inhibiting their productivity and the overall productivity of the Russian economy.

This article will verify whether the central banks create political business cycles or not. To refer to the Opportunistic Model operated by Leetouwer and Maier (2002), this research will expand the acquisition time of data till the fourth season of 2008, and added Korea¡BMalaysia and Taiwan into the model. In this article, the independent variables will be the rates announced by central banks of these ten countries. The dependent variables will be the date of president/parliamentary elections and the independence of central bank to verify before the elections whether will the central banks create political business cycles through setting lower rate in monetary policy are pressured by rules or not. The empirical results show that: 1.The assumption of Central banks will use interest rates to create a political business cycle does not hold. This complements with Leetouwer and Maier¡¦s results studied in 2002, the interest rate cannot be used as a tool to create political business cycle. 2. The higher independence of central bank, the interest rate introduced by central bank will be lower, and as well as the inflation rate.

Generally speaking, business cycle could be discussed as a short-term fluctuation of business cycle and long-term economic growth. In this research, we will confer what impact factors might have affected the business cycle of correlations (BCCs) across countries in a period of short time. Many empirical analysis have pointed out the temporary factors to the business cycle mainly come from the transferred factors of economic aspect. This is called ¡§Transmission Mechanisms.¡¨ What is ¡§Transmission Mechanisms?¡¨ Economists often try to substitute it in good markets, financial markets, and the coordination of monetary policies. However, in this duration of the empirical analysis, using only these proxy variables to explain BCCs between two countries seems too limited. According to this situation, we believe if the BCCs can be explained by using proxy factors of non-economic variable, the result can be utilized by making up the defect. We attempt to find new factors in political approach and combine with the ¡§Transmission Mechanisms¡¨ that we have introduced earlier. After that, we expect to comprehend the BCCs among G7 countries from the inputs of the two completed different variables. To analyze further economic implication in our research, five conclusions have been summarized below: Firstly, increasing bilateral trade has significantly provided positive effect to BCCs among G7 countries from 1980 to 2002. Because the empirical result of Single Country is insignificant, we then use a two-stage method. First, we estimate ¡§Trade¡¨ from endogenous variable to exogenous one. Secondly, we use Panel method to expand its matrix. Finally, we improve the empirical estimators of insignificant statistics before. In other words, the important variables of the correlation of bilateral trade are whether or not the two countries speak the same language; the border problem, and the distance between the two are the same, etc. So, when we talk about the relations between BCCs and good and service markets, we must consider these exogenous factors. Eventually, we will receive more detailed results. Secondly, although to trade in financial markets can increase the BCCs between two countries, the statistic report is insignificant -0.0019 (0.0012). About this empirical result, we can obtain reasonable explanations from the researches (for instance: Imbs, 2004 or Kose et al, 2003), they point out that financial markets are bound excessively by globalization. Therefore, this will aggravatingly make each country to focus on its specialization. Finally, this situation will make the BCCs getting collapsed among these countries. This also explains that the specialization among these countries will reduce the positive effect from the BBCs to financial markets. Thirdly, in this empirical research of Single-Country, we use three proxy estimators of economics to substitute common properties of the monetary policy. At this point, there are no identical correlations of corresponding among other countries except some significantly negative trends shown to the member countries of European Union. According to this situation, we believe it may be the consequence to all the member countries under some ERM restrictions, which is Treaty of Maastricht. Also, because of the rules form this treaty, the monetary policies are getting to be accordant, and the BCCs among the countries will soon appear in obviously positive trend. Fourthly, in the model, the difference of the inflation rate between two countries is not significant with BCCs; therefore, an identical correlation is hardly shown. Moreover, the coefficient symbol is not in our expecting direction, so we think maybe some policies are neglected to the influence of this variable. After all these, we believe if we can control some relative policy effect to inflation rate when discussing the relationship between this variable and the BCCs, we should be able to find out the real effect of this substitutive variable to BCCs Lastly, in the research, the statistics effect of the party variables and business cycle of correlations are very significant. This also indicates the political factor will play an important role for many sources of the fluctuation tread of BCCs. In other words, when we discuss the issue of BCCs if miss the contribution of political factors to the BCCs. Then, this might cause the omitted variable biased, and finally cause the whole computation become inefficient. In addition, we can have further discussion by an input of a factor: to conserve the joint benefit of all the member countries in an economic organization, these countries need to be ruled by the same ideal political party. Otherwise, the institute will never reach its essential result. Combining all the conclusions we have shown above, we can find out the BCCs among G7 countries from 1980-2002. Besides the influence of the ¡§Transmission Mechanisms,¡¨ the result will be varied by the political factors. In conclusion, we need to consider the contribution of the political party variables to the BCCs when talking about this issue, therefore; the original theoretical model can be more persuasive. According to a statistics of IMF, the BCCs among those industrial countries are falling little by little in recent years. Therefore, consolidating trade cooperation is essential for what we believe to improve the BCCs among G7. At the same time, pass through a strong integrate monetary policy can move forward all the incumbent parties from all the countries to agree among themselves, and even reach more substantial effect. From the example like this, we might find evidence from BCCs issues by discussing the integration process in European Monetary Union.

This dissertation includes three different topics concerning the political business cycles in developed countries. In the first section, we use annual data for 48 states from 1951 to 2004 by the method of instrumental variables estimation. We find that the partisan theory created in statewide via two channels including the partisanship effect which include the interactive relationships between president and governors or among governors, and the partisan ideology including the policy preferences are both potential shocks to a real business cycle. Next, we investigate the theory of partisan cycles using panel cointegration and fully modified OLS techniques based on the same data as earlier. We propose the long-run co-movement and the causal relationships between partisan target and cycle variables. Meanwhile, the panel error correction model shows evidence of long-run unidirectional causality running from partisan variables to target variables. This shows that, in the long run, statewide economic performance must be directly based on politicians¡¦ concerns for policies and outcomes, as well as on exhibiting strong ideological differences in those preferences across parties in the United States. Overall, we contribute an essential reference to the voters. Finally, a new government popularity index (GPI) is constructed and using variables that include real GDP, industrial production, the unemployment rate and the inflation rate as measures of bilateral activity correlation beginning in 1981Q1 and ending in 2005Q4 for 15 European countries. The estimation procedure is developed by rolling the correlation of bilateral activity every twenty quarters and running it on partisan variables, namely, as a kind of government popularity index and the difference between partisan ideologies combined with traditional bilateral trade intensity variables. Overall, a strong and striking empirical finding is uncovered: countries with closer popular governments, incumbent ideologies as well as trade links, tend to have more closely correlated business cycles.

This thesis seeks to analyze the phenomenon of political business cycle (PBC) in the Czech Republic. It follows up the efforts of previous authors to determine the existence and subsequent character of the PBC in the country. Based upon the related works, it summarizes the current situation. However, unlike the previous analyses, this work concerns the monetary side of the economy. To be more precise, it examines the role of the Czech National Bank (CNB) within the process of political business cycle. It questions the level of independency of the CNB and poses a question whether the institution might actively participate in the creation of PBC. The following empirical analysis reveals that the CNB actively reduces the monetary base level in the economy within the pre-election period. It might signal its tendency to mitigate opportunistic behavior of the government.

This paper tests for the Euro zone the hypothesis put forward by Sapir and Sekkat (1999) that synchronizing elections might improve welfare. After identifying a political budget cycle in the Euro zone we build a politico-macroeconomic model and simulate the effects of adopting a common election day in the 12 Euro zone member states. The results support most of the theoretical predictions by Sapir-Sekkat: (i) Synchronizing the elections could enhance GDP growth, reduce unemployment, but leads to increased inflation and in some countries to a deterioration of the budget; higher inflation forces ECB to monetary restrictions. (ii) If the synchronization happens asymmetrically - either only in the large or only in the small Euro zone countries - the result depends on the size of the spillovers. (iii) As anticipated in Sapir -Sekkat a common election day is a further step towards the desired "European business cycle", however, at the cost of increasing its amplitude. Harmonizing elections is another method of policy coordination. Whether this leads to higher welfare is a matter of weighting the different macroeconomic outcomes and it also depends on the model applied. (author's abstract) / Series: EI Working Papers / Europainstitut

Abstract Based upon the Nordhaus' model, we can analyze the political business cycle (PBC) of parliamentarian system. This is our point in this paper. Adding an uncertain factor in the Nordhaus' assumptions, we can get unemployment rate of optimal control path by using the dynamic optimal control theory. Comparing these two results, the model of political business cycle of parliamentarian system has higher elective frequency and lower amplitude in the unemployment rate of optimal control path. From the social welfare point of view, which one is better is hard to say? The social welfare is decided by voters' preferences when voters face these two type of PBC. Keywords: Political business cycle (PBC). Parliamentarian system. The optimal

This research attempts to examine whether economic, social, political and institutional factors affected local public expenditures (per capita) in Taiwan. The panel data regression analysis, covering the period from 1989 to 2007, used statistics from the 21 prefectures (5 cities and 16 counties) of Taiwan by applying the median voter model and political business cycle (PBC) model. The findings from the empirical data suggest that the explanatory variable of the median income is significant and has a positive sign as predicted by the priori expectation, with the exception of economic development expenditure. The gap between the median income and average income variables has positive signs in the total, social welfare, police and economic development expenditures. The tax share variable and grant variable on all categories of spending are significant, but the positive sign of the tax share variable contrasts a priori expectations. The population variable and population density variable have negative signs in different expenditures, while the social welfare and the education, science, and culture expenditures have positive signs. Comparing the difference before and after the downsizing of the Taiwan Provincial Government, the significance of the latter is higher than the former, and the effects of various variables differ. The results of this research also indicated that the variables of the pre-election year, election year and post-election year demonstrated statistical significance with varying directional tendencies, and that the results are inconsistent with the traditional hypothesis of the election cycle. The incumbent magistrates or mayors, regardless of whether they do or do not intend on re-election, exhibit no significant influence on most expenditures, and thus this does not agree with a priori expectations. The administrative satisfactions of incumbent magistrates or mayors have statistically significant influence on the expenditures and deficits. Generally, the Pan-KMT incumbent magistrates or mayors have more motives to increase the total and capital expenditures and deficits than the Pan-DPP. Interestingly, the KMT party, which held the majority of seats in the county council, has a positive sign and statistically significant influence on the expenditure of grants to townships. The evidence has demonstrated that a unified government or divided government (horizontal type or vertical type) has no significant influence on most of the expenditure forms, although a negative sign on social welfare expenditure is evident in 21 counties and cities. The lagged deficit is significant with a positive sign, which implies that the insufficiency of local accountability and deficits are becoming a long-term problem. When comparing the power of the median voter model and political business cycle model in explaining the local public expenditure, a non-nested test was implemented. No model was found to hold an advantage over another model. In brief, the current research indicates that the factors of the majority voters' demands, elections and parties indeed have different influences on various expenditure forms in Taiwan.

This diploma thesis focuses on political-business cycle which is a theme frequently omitted in discussions about economic situation in the Czech Republic. Theoretical part of the work will provide readers with the topic of political-business cycle and its basic models which will serve as a support to the statistical research in the analytical part. Is fiscal policy in hands of Czech politicians an efficient tool to manipulate voters? The aim of the work is to answer this question and thus give a detailed look of political-business cycle on example of four regular electoral periods of Czech Parliament. To reach the goal of diploma thesis, we used regressive analysis to examine hypothesis if the date of elections influences certain folders of income and expenses of government budget. This hypothesis was not accepted on the significance level of 5 per cent. The reasons are mainly short time series of tested indicators.