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.