Graduation Year

2015

Date of Submission

4-2015

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Cameron Shelton

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2015 Patrick J. Shultz

Abstract

While the consequences of political distortions on fiscal cyclicality have been thoroughly analyzed, there are few studies that specify which political variables create these distortions. In this paper I use political-economy theories of the deficit as a basis as to why fiscal cyclicality deviates from what is predicted by tax-smoothing and Keynesian models. Specifically, I examine the effects of political polarization, the years an incumbent has been in office, party affiliation, and fiscal federalism to partition how political characteristics affect fiscal responses to changes in GDP growth. I find that governments tend to be more responsive to changes in GDP growth further away from elections, left leaning governments are more responsive than right leaning governments, mixed results for political polarization, and that unitary governments are more responsive than federalist governments.

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