TY - JOUR
T1 - General elections and government expenditure cycles: Theory and evidence from the UK
AU - Easaw, Joshy Z.
AU - Garratt, Dean
PY - 2006/6/1
Y1 - 2006/6/1
N2 - This paper presents a testable theoretical framework that extends the standard demand-side approach to modelling government expenditure on goods and services. The focus is on the adjustment of expenditure to disequilibria: we investigate whether the adjustment of UK exhaustive government expenditure between 1966 and 2002 to its long-run equilibrium path is symmetric. The evidence points to asymmetric adjustment to the demands of a representative voter over the election cycle but not between Labour and Conservative governments. Convergence to equilibrium is faster during the later stages of each election cycle.
AB - This paper presents a testable theoretical framework that extends the standard demand-side approach to modelling government expenditure on goods and services. The focus is on the adjustment of expenditure to disequilibria: we investigate whether the adjustment of UK exhaustive government expenditure between 1966 and 2002 to its long-run equilibrium path is symmetric. The evidence points to asymmetric adjustment to the demands of a representative voter over the election cycle but not between Labour and Conservative governments. Convergence to equilibrium is faster during the later stages of each election cycle.
KW - Government expenditure
KW - Error correction models
KW - Asymmetric adjustment
KW - Threshold adjustment
UR - http://www.scopus.com/inward/record.url?eid=2-s2.0-33646252472&partnerID=MN8TOARS
UR - https://www.sciencedirect.com/science/article/pii/S0176268005000716
U2 - 10.1016/j.ejpoleco.2005.08.003
DO - 10.1016/j.ejpoleco.2005.08.003
M3 - Article
SN - 0176-2680
VL - 22
SP - 292
EP - 306
JO - European Journal of Political Economy
JF - European Journal of Political Economy
IS - 2
ER -