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Does the expectation or realization of a federal election precipitate Canadian output growth?

Does the expectation or realization of a federal election precipitate Canadian output growth? Abstract This paper asks whether Canadian data is consistent with the predicted effects of political opportunism, partisanship, and political competition on real output growth since Confederation. Using annual data from 1870 to 2005 we find new support for an opportunistic electoral cycle in Canadian data but only if the actual election date used in most studies is replaced by an estimate of the incumbent governing party's subjectively held likelihood of an election arising. In our case the estimate is generated from a Cox‐proportional hazard model. The paper explores in detail the issues raised by using a generated regressor to approximate a subjectively held expectation versus an observable proxy and argues that these conditions are met in our case. Finally we also find evidence consistent with partisan cycles in the data but much less evidence consistent with the hypothesis that changes in the degree of political competition have affected real output growth. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Canadian Journal of Economics/Revue Canadienne D'économique Wiley

Does the expectation or realization of a federal election precipitate Canadian output growth?

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References (54)

Publisher
Wiley
Copyright
Copyright © 2011 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0008-4085
eISSN
1540-5982
DOI
10.1111/j.1540-5982.2010.01625.x
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper asks whether Canadian data is consistent with the predicted effects of political opportunism, partisanship, and political competition on real output growth since Confederation. Using annual data from 1870 to 2005 we find new support for an opportunistic electoral cycle in Canadian data but only if the actual election date used in most studies is replaced by an estimate of the incumbent governing party's subjectively held likelihood of an election arising. In our case the estimate is generated from a Cox‐proportional hazard model. The paper explores in detail the issues raised by using a generated regressor to approximate a subjectively held expectation versus an observable proxy and argues that these conditions are met in our case. Finally we also find evidence consistent with partisan cycles in the data but much less evidence consistent with the hypothesis that changes in the degree of political competition have affected real output growth.

Journal

Canadian Journal of Economics/Revue Canadienne D'économiqueWiley

Published: Feb 1, 2011

Keywords: ;

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