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POLITICAL ASPECTS OF ECONOMIC CYCLES

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Paczes P.

Myśl Ekonomiczna i Prawna

2008

issue 1(20)

84-109

One of the possible conceptions of how to explain the mechanism of the cycle occurrence is the theory of political business cycle. According to it, systematic changes in the level of economic activity are an implication of the actions undertaken by the politicians being in power. A comparative analysis of four basic models of political business cycle has been presented. The first two models , M. Kalecki's and J. Akerman's, started a discussion on the possibility of an occurrence of fluctuations conditioned by political factors. The other two models, W. D. Nordhous' and D. A.Hibbs', constitute a basis for advanced studies within the two currents of the political cycle theory, i.e. the so called opportunistic and ideological ones. The analysis resulted in a conclusion that a cycle based on political circumstances can develop as a result of economic policy instruments manipulation with the use of the so called internal and external factors. The internal factors comprise government actions motivated by patriotic reasons or egoistic ones , originating in the subjective believes of the politicians in power or their desire to win the forthcoming election. The external factors, on the other hand, comprise direct or indirect pressure brought by various social groups. As a result, it was concluded that a government can trigger off fluctuations in its own interest as well as in the interest of various social groups.

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1 Myśl Ekonomiczna i Prawna

1 Paczes P.

1 2008

Search results

POLITICAL ASPECTS OF ECONOMIC CYCLES