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American Economic Review: Vol. 104 No. 1 (January 2014)

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Social Ideology and Taxes in a Differentiated Candidates Framework

Article Citation

Krasa, Stefan, and Mattias Polborn. 2014. "Social Ideology and Taxes in a Differentiated Candidates Framework." American Economic Review, 104(1): 308-22.

DOI: 10.1257/aer.104.1.308

Abstract

Many observers argue that political polarization, particularly on social and cultural issues, has increased in the United States. How does this influence the political competition on economic issues? We analyze this question using a framework in which two officemotivated candidates differ in their fixed ideological position and choose a level of government spending to maximize their vote share. In equilibrium, candidates cater to a set of swing voters who contain socially conservative and economically-liberal voters, as well as socially-liberal and economically-conservative voters. We analyze how voters' cultural preferences and candidates' cultural positions influence equilibrium economic positions.

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Authors

Krasa, Stefan (U IL)
Polborn, Mattias (U IL)

JEL Classifications

D72: Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
E62: Fiscal Policy
H50: National Government Expenditures and Related Policies: General
Z13: Economic Sociology; Economic Anthropology; Social and Economic Stratification


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