Macroeconomic policy and politics in a three-party system: a noncooperative bargaining approach

Analyse: Partisans cycles in inflation and output growth typically occurs in a two-party system with rational voters, as a result of polarization between alternating policymakers.
In addition, elections in such a bipolar system may induce in policymaker expecting to be defeated to use public debt in order to constrain the policy of the future government.
This thesis shows that in a three-party system which requires a two-party coalition for a government to form, the ideal point of the party with intermediate preferences is the unique equilibrium of the legislative bargaining game, except under a particular distribution of votes.
Only in that case does the economy exhibit a partisan shock and the pivotal party agrees upon a strategic level of public debt.
However, the magnitude of both political bias, which depends upon parties' relative motivations for seeking office, is not larger than those resulting from a two-party competition.

Publication infos:
Genève, Institut universitaire de hautes études internationales, 1994
Publication year:
Number of pages:
III, 118 p.
PhD Director(s):
Directeur de thèse: Professeur Hans Genberg
Call number:

 Record created 2011-06-03, last modified 2019-09-30

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