Boylan, Richard T. and McKelvey, Richard D. (1995) Voting over economic plans. American Economic Review, 85 (4). pp. 860-871. ISSN 0002-8282. http://resolver.caltech.edu/CaltechAUTHORS:BOYaer95
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We review and provide motivation for a one-sector model of economic growth in which decisions about capital accumulation are made by a political process. If it is possible to commit for at least three periods into the future, then for any feasible consumption plan, there is a perturbation that is majority-preferred to it. Furthermore, plans that minimize the maximum vote that can be obtained against them yield a political business cycle. If it is impossible to commit, voters select the optimal consumption plan for the median voter.
|Additional Information:||© 1995 American Economic Association. Support for this research was provided, in part, by NSF grant no. SES-9022932 to the California Institute of Technology. We are grateful for the comments of five referees. B. Douglas Bernheim pointed out that our results could be extended to supramajority rules, as in Proposition 1. The intuition suggested by a referee replaces the formal proofs that were originally in this paper. The original and more general results can now be found in a separate paper written together with John Ledyard (Boylan et al.,1996).|
|Subject Keywords:||POLITICAL BUSINESS-CYCLE; MACROECONOMIC POLICY|
|Usage Policy:||No commercial reproduction, distribution, display or performance rights in this work are provided.|
|Deposited By:||Lindsay Cleary|
|Deposited On:||17 Sep 2008 04:49|
|Last Modified:||26 Dec 2012 10:17|
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