Open access
Date
2012-09Type
- Working Paper
ETH Bibliography
yes
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Abstract
We use real‐time annual data on the fiscal balance, government current spending, current revenues and net capital outlays as published at a half yearly frequency in the OECD Economic Outlook for 25 OECD countries. For each fiscal year t we have a number of forecasts, a first release, and subsequent revisions. It turns out that revisions in the fiscal balance data are not affected by elections. However, we do find that governments spend more than reported before an election which provides support for moralhazard type of political budget cycle (PBC) models: through hidden efforts the incumbent tries to enhance his perceived competence. We also find that governments had higher current receipts than reported before an election, which is in line with adverse‐selection type of PBC models in which incumbents signal competence through expansionary fiscal policy before the elections. Show more
Permanent link
https://doi.org/10.3929/ethz-a-007362342Publication status
publishedJournal / series
KOF Working PapersVolume
Publisher
KOF Swiss Economic Institute, ETH ZurichSubject
ELECTIONS (INTERNAL POLITICS); Real‐time data; BUSINESS FORECASTS; FORECASTING BASED ON STATISTICS (MATHEMATICAL STATISTICS); BETRIEBSWIRTSCHAFTLICHE PROGNOSE; DATA ANALYSIS (MATHEMATICAL STATISTICS); OCDE; KONJUNKTURPOLITIK; STABILIZATION POLICY; OECD; PROGNOSEN AUF STATISTISCHER BASIS (MATHEMATISCHE STATISTIK); DATENANALYSE (MATHEMATISCHE STATISTIK); WAHLEN (INNENPOLITIK); Political budget cyclesOrganisational unit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
Related publications and datasets
Is identical to: http://hdl.handle.net/20.500.11850/78047
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ETH Bibliography
yes
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