The Effects of Politics on Fiscal Policy over the Last Seven Business Cycles

Summary As the year of election, what you are hearing is the policy of the new presidential candidate to attack the current president. Among all administrative policies, his economic position, economic health under his administration, and this fiscal policy are the most common. Whether the possibility of losing the election affects the government's response to recession? This paper shows that politics is not a problem in the past five years when considering what kind of measures the government needs to take to promote economic development in the economic cycle over the past five years .

Fiscal policy: An important concept of Keynesian fiscal policy is the "anti-cyclical" fiscal policy expected to reduce the negative impact of the natural economic cycle. This is usually achieved by spending deficits during recession and suppression of inflation at boom. In short, the government should suppress extreme economic instability through sufficient information-based fiscal policy. Multiplier effect: This idea is implicitly included in Atom in various ways, but vice versa. Consider the problems of unemployment and excessive savings, and how they lead to a reduction in spirals. The other side of this coin is that the positive economic situation may rise. Let's consider investment in government transportation as an example. I will invest money in everyone's pocket that makes trains and tracks. These people will spend extra money to deposit money to other companies (this will continue)

Many economists assume that the economic cycle is the result of the politically motivated use of macroeconomic policies (money and fiscal policies) to help politicians run for re-election. The premise of political cyclical theory is to believe that elected officials (president, parliamentarians, governors, etc.) tend to devise extensive macroeconomic policies to support re-election. Changes in the monetary policy of the country are irrelevant to changes due to political pressure, but it is also an important element of the business cycle. Fiscal policy - the use of government expenditure and increased tax cuts - is the most common way to promote aggregate demand and lead to economic expansion. As far as the United States is concerned, the central bank is the Federal Reserve Bank, which has two legal objectives, price stability and full employment.