Aggregate uncertainty, political instability and redistribution

Bellettini, Giorgio (1995) Aggregate uncertainty, political instability and redistribution. Bologna: Dipartimento di Scienze economiche DSE, p. 31. DOI 10.6092/unibo/amsacta/5113. In: Quaderni - Working Paper DSE (213). ISSN 2282-6483.
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Abstract

This paper associates political instability to real shocks affecting the income of the median voter, in a two-period model where two political parties set redistribution in order to defend the interests of well-de¯ned constituencies. Implemented policies affect future voting outcomes and an intertemporal trade-off arises for the parties since their optimal one-period strategy does not maximize the probability of being reelected. The higher the volatility of the real shock, the more likely that parties deviate from the optimal one-period strategy by choosing a conservative strategy, which increases their chances of reelection and the expected lifetime utility of their constituencies.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Bellettini, Giorgio0000-0002-6768-9506
Subjects
ISSN
2282-6483
DOI
Deposit date
10 May 2016 08:00
Last modified
11 May 2016 07:35
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