Hyperbolic memory discounting and the political business cycle

European Journal of Political Economy

Volumn 40, Issue , 2015, Pages 345-359

  Findley, T Scott ^a  

^a UTAH STATE UNIVERSITY   (United States)

Author keywords

Hyperbolic memory discounting; Inflation; Jost's Second Law of Forgetting; Political business cycle; Unemployment

Indexed keywords

EID: 84947967358     PISSN: 01762680     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.ejpoleco.2015.08.002     Document Type: Article

References (75)

1. Agliari A., Chiarella C., Gardini L. A re-evaluation of adaptive expectations in light of global nonlinear dynamic analysis. J. Econ. Behav. Organ. 2006, 60:526-552.
2. Aidt T.S., Veiga F.J., Veiga L.G. Election results and opportunistic policies: a new test of the rational political business cycle model. Public Choice 2011, 148:21-44.
3. Ainslie G. Specious reward: a behavioral theory of impulsiveness and impulse control. Psychol. Bull. 1975, 82:463-496.
4. Alesina A. Macroeconomic policy in a two-party system as a repeated game. Q. J. Econ. 1987, 102:651-678.
5. Alesina A., Rosenthal H. Partisan Politics, Divided Government, and the Economy 1995, Cambridge University Press, New York.
6. Alin L.H. The memory laws of Jost. Göteb. Psychol. Rep. 1997, 27:1-21.
7. Anderson C.J. Economic voting and political context: a comparative perspective. Elect. Stud. 2000, 19:151-170.
8. Averell L., Heathcote A. The form of the forgetting curve and the fate of memories. J. Math. Psychol. 2011, 55:25-35.
9. Basak, G.K., Ghosh, M.K., Mukherjee, D., 2015. A mean-reverting stochastic model for the political business cycle. Working paper, unpublished. Indian Statistical Institute, Kolkata, India.
10. Brown G.D.A., Neath I., Chater N. A temporal ratio model of memory. Psychol. Rev. 2007, 114:539-576.
11. Burmeister E., Turnovsky S.J. The specification of adaptive expectations in continuous time dynamic economic models. Econometrica 1976, 44:879-905.
12. Caliendo F.N., Findley T.S. Discount functions and self-control problems. Econ. Lett. 2014, 122:416-419.
13. Campbell J.E., Dettrey B.J., Yin H. The theory of conditional retrospective voting: does the presidential record matter less in open-seat elections?. J. Polit. 2010, 72:1083-1095.
14. Chappell H.W. Presidential popularity and macroeconomic performance: are voters really so naive?. Rev. Econ. Stat. 1983, 65:385-392.
15. Chappell D., Peel D.A. On the political theory of the business cycle. Econ. Lett. 1979, 2:327-332.
16. Ebbinghaus H. Ueber das Gedächtnis 1885, Verlag von Duncker & Humbolt, Leipzig.
17. Efthyvoulou G. Political budget cycles in the European Union and the impact of political pressures. Public Choice 2012, 153:295-327.
18. Evans G.W., Honkapohja S. Learning and Expectations in Macroeconomics 2001, Princeton University Press, Princeton.
19. Fair R.C. The effect of economic events on votes for president. Rev. Econ. Stat. 1978, 60:159-173.
20. Fiorina M.P. Retrospective Voting in American National Elections 1981, Yale University Press, New Haven.
21. Foremny D., Riedel N. Business taxes and the electoral cycle. J. Public Econ. 2014, 115:48-61.
22. Francis W.L., Kenny L.W., Morton R.B., Schmidt A.B. Retrospective voting and political mobility. Am. J. Polit. Sci. 1994, 38:999-1024.
23. Garca-Sanchez I.-M., Mordán N., Cuadrado-Ballesteros B. Do electoral cycles affect local financial health?. Policy Stud. 2014, 35:533-556.
24. Gordon R.J. The time-varying NAIRU and its implications for economic policy. J. Econ. Perspect. 1997, 11:11-32.
25. Haller H.B., Norpoth H. Let the good times roll: the economic expectations of U.S. voters. Am. J. Polit. Sci. 1994, 38:625-650.
26. Herrnstein R.J. Relative and absolute strength of responses as a function of frequency of reinforcement. J. Exp. Anal. Behav. 1961, 4:267-272.
27. Hey J.D. Expectations formation: rational or adaptive or.?. J. Econ. Behav. Organ. 1994, 25:329-349.
28. Hibbs D.A. Political parties and macroeconomic policies. Am. Polit. Sci. Rev. 1977, 71:1467-1487.
29. Hibbs D.A. The American Political Economy: Macroeconomics and Electoral Politics 1987, Harvard University Press, Cambridge.
30. Hibbs D.A. Partisan theory after fifteen years. Eur. J. Polit. Econ. 1992, 8:361-373.
31. Hibbs D.A., Vasilatos N. Economics and politics in France: economic performance and mass political support for Presidents Pompidou and Giscard d'Estaing. Eur. J. Polit. Res. 1981, 9:133-145.
32. Hibbs D.A., Vasilatos N. Economic outcomes and political support for British governments among occupational class: a dynamic analysis. Am. Polit. Sci. Rev. 1982, 76:259-279.
33. Hibbs D.A., Rivers R.D., Vasilatos N. On the demand for economic outcomes: macroeconomic performance and mass political support in the United States, Great Britain, and Germany. J. Polit. 1982, 44:426-462.
34. Hovland C.I. Human learning and retention. Handbook of Experimental Psychology 1951, 613-689. John Wiley & Sons, Inc., New York. S.S. Stevens (Ed.).
35. Jost A. Die Assoziationsfestigkeit in ihrer Abhä ngigkeit von der Verteilung der Wiederholungen. Z. Psychol. Physiol. Sinnesorgane 1897, 14:436-472.
36. Kalecki M. Political aspects of full employment. Polit. Q. 1943, 14:322-330.
37. Kiewiet D.R., Udell M. Twenty-five years after Kramer: an assessment of economic retrospective voting based upon improved estimates of income and unemployment. Econ. Polit. 1998, 10:219-248.
38. King T.B., Morley J. In search of the natural rate of unemployment. J. Monet. Econ. 2007, 54:550-564.
39. Klomp J., de Haan J. Political budget cycles and election outcomes. Public Choice 2013, 157:245-267.
40. Lächler U. On political business cycles with endogenous election dates. J. Public Econ. 1982, 17:111-117.
41. Laibson D. Golden eggs and hyperbolic discounting. Q. J. Econ. 1997, 112:443-478.
42. Laibson D. Life-cycle consumption and hyperbolic discount functions. Eur. Econ. Rev. 1998, 42:861-871.
43. Lanoue D.J. Retrospective and prospective voting in presidential-year elections. Polit. Res. Q. 1994, 47:193-205.
44. Lee J., Nelson C.R. Expectation horizon and the Phillips curve: the solution to an empirical puzzle. J. Appl. Econ. 2007, 22:161-178.
45. Mueller D.C. Public Choice III 2003, Cambridge University Press, Cambridge UK.
46. Murakami M.H. Paradoxes of democratic accountability: polarized parties, hard decisions, and no despot to veto. Crit. Rev. J. Polit. Soc. 2008, 20:91-113.
47. Muth J.F. Optimal properties of exponentially weighted forecasts. J. Am. Stat. Assoc. 1960, 55:299-306.
48. Myerson J., Green L. A discounting framework for choice with delayed and probabilistic rewards. Psychol. Bull. 2004, 130:769-792.
49. Myerson J., Green L., Warusawitharana M. Area under the curve as a measure of discounting. J. Exp. Anal. Behav. 2001, 76:235-243.
50. Myerson J., Green L., Hanson J.S., Holt D.D., Estle S.J. Discounting delayed and probabilistic rewards: processes and traits. J. Econ. Psychol. 2003, 24:619-635.
51. Nadeau R., Lewis-Beck M.S. National economic voting in U.S. presidential elections. J. Polit. 2001, 63:159-181.
52. Nordhaus W.D. The political business cycle. Rev. Econ. Stud. 1975, 42:169-190.
53. Rachlin H. Notes on discounting. J. Exp. Anal. Behav. 2006, 85:425-435.
54. Rachlin H., Green L. Commitment, choice and self control. J. Exp. Anal. Behav. 1972, 17:15-22.
55. Rogoff K. Equilibrium political budget cycles. Am. Econ. Rev. 1990, 80:21-36.
56. Rubin D.C., Wenzel A.E. One hundred years of forgetting: a quantitative description of retention. Psychol. Rev. 1996, 103:734-760.
57. Salemi M.K. Estimating the natural rate of unemployment and testing the natural rate hypothesis. J. Appl. Econ. 1999, 14:1-25.
58. Sargent T.J. The Conquest of American Inflation 1999, Princeton University Press, Princeton.
59. Shelton C.A. Legislative budget cycles. Public Choice 2014, 159:251-275.
60. Shepherd B. When are adaptive expectations rational? A generalization. Econ. Lett. 2012, 115:4-6.
61. Sieg G. A model of partisan central banks and opportunistic political business cycles. Eur. J. Polit. Econ. 1997, 13:503-516.
62. Sieg G. A political business cycle with boundedly rational agents. Eur. J. Polit. Econ. 2001, 17:39-52.
63. Sieg G. A model of an opportunistic-partisan political business cycle. Scott. J. Polit. Econ. 2006, 53:242-252.
64. Snowdon B. Politics and the business cycle. Polit. Q. 1997, 68:255-265.
65. Söderlund P. Retrospective voting and electoral volatility: a Nordic perspective. Scand. Polit. Stud. 2008, 31:217-240.
66. Sorge M.M. Generalized adaptive expectations revisited. Econ. Lett. 2013, 120:203-205.
67. Staiger D.O., Stock J.H., Watson M.W. How precise are estimates of the natural rate of unemployment?. Reducing Inflation: Motivation and Strategy 1997, 195-246. University of Chicago Press, Chicago. C.D. Romer, D.H. Romer (Eds.).
68. Strotz R.H. Myopia and inconsistency in dynamic utility maximization. Rev. Econ. Stud. 1956, 23:165-180.
69. Suzuki M. The rationality of economic voting and the macroeconomic regime. Am. J. Polit. Sci. 1991, 35:624-642.
70. Vásquez-Ruz, H.A., Rivas, R., Diaz, R., 2014. Do politics determine policy? Evidence on the political-economic business cycle in the Dominican Republic. Working paper, unpublished. Central Bank of the Dominican Republic, Santo Domingo, Dominican Republic.
71. Williams K.C. Sequential elections and retrospective voting: some laboratory experiments. J. Theor. Polit. 1994, 6:239-255.
72. Wixted J.T. The psychology and neuroscience of forgetting. Annu. Rev. Psychol. 2004, 55:235-269.
73. Wixted J.T., Ebbesen E.B. On the form of forgetting. Psychol. Sci. 1991, 2:409-415.
74. Yi R., Gatchalian K.M., Bickel W.K. Discounting of past outcomes. Exp. Clin. Psychopharmacol. 2006, 14:311-317.
75. Yi R., Landes R.D., Bickel W.K. Novel models of intertemporal valuation: past and future outcomes. J. Neurosci. Psychol. Econ. 2009, 2:102-111.