General elections and government expenditure cycles: Theory and evidence from the UK

Joshy Z. Easaw, Dean Garratt

Research output: Contribution to journalArticlepeer-review

Abstract

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.
Original languageEnglish
Pages (from-to)292-306
JournalEuropean Journal of Political Economy
Volume22
Issue number2
Early online date12 Oct 2005
DOIs
Publication statusPublished - 1 Jun 2006

Keywords

  • Government expenditure
  • Error correction models
  • Asymmetric adjustment
  • Threshold adjustment

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