Social and Behavioral Sciences Commons^™

The Presidential Business Cycle In The U.S.: A Theoretical And Empirical Examination, Ranjit S. Dighe

Honors Papers

The idea of a politically-motivated business cycle is basically a conspiracy theory: "office-motivated" politicians, seeking to exploit the well-documented relationship between favorable economic news and votes for the incumbent president and his party, manipulate the timing of business cycles for their own electoral gain. This manipulation, theorists maintain, is effected through the use of any of several policy instruments including discretionary federal spending, government transfer payments, and the average tax rate, as well as pressure on the central bank to pursue a more accommodating monetary policy.

Theories of such a cycle seem to fall in and out of favor with …