 | Professor of Economics, University of Maryland Verified email at econ.umd.edu Cited by 10207 |
C Azariadis… - The Quarterly Journal of Economics, 1990 - qje.oxfordjournals.org
Abstract Standard one-sector growth models often have the counterfactual implication that
economies with access to similar technologies will converge to a common balanced growth
path. We propose an elaboration of the Diamond model that permits multiple, locally ...
[CITATION] Political economy in macro economics
This paper presents a model in which economic crises have positive effects on welfare.
Periods of very high inflation create the incentive for the resolution of social conflict and thus
facilitate the introduction of economic reforms and the achievement of higher levels of ...
Standard models of policy credibility. defined as the expectation that an announced policy
will be carried out. emphasize the preferences of the policymaker (his" type") and the role of
policies in signaling type. Whether a policy is carried out. however. should also reflect the ...
G Bertola… - 1991 - nber.org
We propose and solve an optimizing model which explains counterintuitive effects of fiscal
policy in terms of expectations. If government spending follows an upward-trending
stochastic process which the public believes may fall sharply when it reaches specific" ...
A quarter of a century has passed since the initial outburst of formal theoretical and empirical
work on political business cycles, that is, on political determinants of macroeconomic cycles.
On the empirical side, there was Kramer's (1971) influential study of economic ...
L Bartolini… - 1997 - nber.org
We present a model in which a government's current capital controls policy signals future
policies. Controls on capital outflows evolve in response to news on technology, conditional
on government attitudes towards taxation of capital. When there is uncertainty over ...
A Brender… - 2004 - nber.org
Like other recent studies, we find the existence of a political deficit cycle in a large cross-
section of countries. However, we find that this result is driven by the experience of new
democracies'. The strong budget cycle in those countries accounts for the finding of a ...
The possibility of contagion in currency crises across countries is highly topical, to say the
least. Though the phenomenon is widely discussed and is supported by solid empirical
evidence,'construction of convincing theoretical models of contagion is still in its infancy. ...
Abstract: The relation between IMF conditionality and country ownership of assistance
programs is considered from a political economy perspective, focusing on the question of
why conditionality is needed if it is in a country's best interests to undertake the reform ...
A Drazen - The Journal of Political Economy, 1978 - JSTOR
In a Samuelson overlapping-generations model, conditions for an operative
interegenerational transfer motive are derived without special assumptions about the form of
the utility function. Crucial in determining if transfers will be positive is the rate at which ...
A Drazen… - The Quarterly Journal of Economics, 1987 - qje.oxfordjournals.org
Abstract Stabilization programs in open economies typically consist of two stages. In the first
stage the rate of currency devaluation is reduced, but the fiscal adjustment does not
eliminate the fiscal deficit that causes growth of debt and loss of reserves, making a future ...
A Drazen… - Economics & Politics, 2001 - Wiley Online Library
We find evidence for the crisis-induces-reform hypothesis at extreme values of the inflation
rate and the black market premium. Episodes of extremely high inflation or black market
premiums are followed by periods of better performance than episodes of moderately high ...
A Drazen - Econometrica: Journal of the Econometric Society, 1980 - JSTOR
Recent papers which use the framework of temporary equilibrium with rationing to explain
unemployment phenomena (sometimes termed" disequilibrium" theory, in which prices do
not clear spot markets) are surveyed and evaluated critically. Models which posit fixed ...
A Drazen… - The Review of Economic Studies, 1990 - restud.oxfordjournals.org
Abstract Budget deficits implying an unbounded present value of government debt are
infeasible and hence induce expectations of a future policy change. We study how
expectations of a policy switch whose timing or mix between expenditure cuts, tax ...
A Brender… - The American Economic Review, 2008 - JSTOR
It is conventional wisdom that incumbents use economic policy to help their reelection pros?
pects, but its effectiveness is not clear a priori. Voters may interpret good macroeconomic
results, for example, as indicating a highly able leader, using simple retrospective voting ...
We present a model of the Political Budget Cycle in which voters and politicians have
preferences for different types of government spending. Incumbents try to influence voters by
changing the composition of government spending, rather than overall spending or ...
GA Calvo… - 1997 - nber.org
We develop a framework to study the effects of policies of uncertain duration on
consumption dynamics under both complete and incomplete markets. We focus on the
dynamic implications of market incompleteness, specifically on the lack of state-contingent ...
L Bartolini… - Journal of International Economics, 1997 - Elsevier
We present a model where policies of free capital mobility can signal governments' future
policies, but the informativeness of the signal depends on the path of world interest rates.
Capital flows to emerging markets reflect investors' perception of these markets' political ...
A Drazen - Economics Letters, 1985 - Elsevier
Abstract A general measure of the revenues from the inflation tax and seignorage is
presented, which is correct across models. Previous measures, seemingly dependent on
specific policy assumptions, can be seen as special cases of this unified measure.
A Drazen - Journal of Monetary Economics, 1979 - Elsevier
Abstract Inflation viewed as a tax on cash balances is investigated using the optimal
commodity tax framework. The optimal inflation rate is shown to depend on the effect of
changes in the rate of inflation on quantity demanded of 'costly-to-produce'goods. Even ...
A Drazen… - Journal of Development Economics, 2010 - Elsevier
We present a model of the political budget cycle in which incumbents try to influence voters
by changing the composition of government spending, rather than overall spending or
revenues. Rational voters may support an incumbent who targets them with spending ...
A Drazen - The Journal of Policy Reform, 1996 - Taylor & Francis
Instead, policy choices often reflect the resolution of conflicts of interest between groups with
different goals; distortions away from optimality may result from the mechanisms for making
collective choices. Recent work ondelayed reform thus often starts with the question: why ...
A Drazen - Journal of Monetary Economics, 1981 - Elsevier
Abstract The effect of inflation on demand for capital and the aggregate capital-labor ratio is
investigated in a finite-horizon utility-maximization model. It is shown that deriving saving
and asset choice decisions from utility maximization does not in itself lead to ...
A Drazen - Journal of Monetary Economics, 1985 - econpapers.repec.org
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Tight money and inflation: Further Results. Allan Drazen. Journal of Monetary
Economics, 1985, vol. 15, issue 1, pages 113-120. Date: 1985 ...
A Drazen - Carnegie-Rochester Conference Series on Public …, 2000 - Elsevier
Our understanding of defense against speculative attacks on fixed exchange rates is
incomplete. Though interest rates are often raised to defend a currency, there is almost no
formal modeling of interest-rate defense. We present a framework of analysis with special ...
A Drazen… - … PAPER-TEL AVIV …, 2002 - primage.tau.ac.il
Persistent deficits, implying secular growth of debt, have led many to argue that fiscal rules
may play an important role in helping reduce or eliminate deficits and help control the
growth of government debt. There are two general classes of fiscal rules. First, there are ...
A Drazen - A European central bank, 1989 - books.google.com
Several European countries rely heavily on inflation tax revenues to finance their
expenditures. Seigniorage accounted for between 6 and 12% of government revenues in
Greece, Italy. Portugal, and Spain in the period 1979-86 (in contrast to generally less than ...
A Brender… - 2005 - nber.org
Conventional wisdom is that good economic conditions or expansionary fiscal policy help
incumbents get re-elected, but this has not been tested in a large cross-section of countries.
We test these arguments in a sample of 74 countries over the period 1960-2003. We find ...
A political-economic model of the composition of government debt, that is, whether it is
issued to domestic or foreign holders, is presented. The key determinant will be the political
constraints on repudiation of foreign and domestic debt, which will determine the nature of ...
A Drazen - The Economic Journal, 1986 - JSTOR
In this paper we present a model in which minimum wage legislation may be Pareto optimal.
This arises because a higher wage would be preferred to the market clearing wage by
demanders for and suppliers of labour (even though unemployment is induced), and ...
A Drazen… - The American economic review, 1988 - JSTOR
How does the organization of rural land and labor markets affect capital accumulation and
long-run aggregate income in the development process? We show that in a simple dual
economy model capital accumulation and aggregate income will be lowest when both ...
A Drazen - Unpublished manuscript.(April 1999), 1999 - time.dufe.edu.cn
ABSTRACT: We consider the case for withholding foreign aid from countries with a history of
aid being ineffective in achieving its goals. The argument may be summarized by four
statements. First, foreign aid is often ineffective in achieving its aims because it is ...
We use the concepts of deliberative democracy from political science and cheap talk from
economics to develop a better understanding of how public discussion can contribute to
building and demonstrating ownership of IMF programs and hence to program success. ...
A Drazen, N Limão… - Journal of Public Economics, 2007 - Elsevier
The perceived importance of “special interest group” money in election campaigns motivates
widespread use of caps on allowable contributions. We present a bargaining model in which
the effect of a cap that is not too stringent on the amount a lobby can contribute improves ...
A Drazen - NBER macroeconomics annual, 1990 - JSTOR
Table 1 and Figure 2 in the paper consider the prevalence of expansionary effects of fiscal
policy. Taking these data, the episodic description of the Danish and Irish cases, as well as
other episodes, two regularities struck me. First, the effect of a fiscal contraction depends ...
A Drazen - University of Maryland, Dept. of Economics, processed, 1999 - time.dufe.edu.cn
ABSTRACT: Characteristics of speculative attacks, such as the role of asymmetric
information and especially the use of high interest rates to defend a currency, are largely
absent from existing models. A model of defending against speculative attacks by raising ...
In the light of recent currency crises, two key policy questions are how to defend a currency
against attack and what the effects of different avenues of defense are. A commonly used
defense is to raise short-term interest rates sharply to deter speculation. Interest rate ...
A Drazen - European Economic Review, 1987 - econpapers.repec.org
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bookmarks. Reciprocal externality models of low employment. Allan Drazen.
European Economic Review, 1987, vol. 31, issue 1-2, pages 436-443. ...
A Drazen - The American Economic Review, 1988 - JSTOR
Models of economic activity with frictions in coordinating trading have been shown to be
capable of generating multiple steady states.(Peter Diamond, 1982, is the pioneering work;
see my 1987a paper for a general discussion.) Less work has been done on out-of-steady ...
A Brender… - 2003 - papers.ssrn.com
Abstract: Whereas a political budget cycle was once thought to be a phenomenon of less-
developed economies, some recent studies find such a cycle in a large cross-section of both
developed and developing countries. We find that this result is driven by the experience of' ...
We consider a model in which the level of taxes and seignorage are too low to finance
government expenditures and debt service. Government debt will therefore grow without
bound, implying the eventual need to change policy. Starting with utility maximization, we ...
A Drazen… - International Economic Review, 2008 - Wiley Online Library
When two policies are available to achieve the same goal why is the relatively inefficient one
often observed? We address this question in the context of policies used to redistribute
income towards special interest groups (SIGs) where in the first stage the constraints on ...
The standard model of signaling used in open economy macroeconomics concentrates on
building a reputation when a policymaker'stype'is unknown. Observing tough policy leads
market participants to raise the probability that a policymaker is tough, and therefore to ...
A Drazen… - Oxford Economic Papers, 1994 - JSTOR
We formulate a stochastic infinite-horizon insider-outsider model that is solved explicitly and
used to investigate the consequences of alternativeseniority'rules for wage and employment
determination. The model is simple enough to allow analysis of several different ...
A Drazen - Journal of Applied Economics, 2002 - redalyc.uaemex.mx
... 2002 Allan Drazen CENTRAL BANK INDEPENDENCE, DEMOCRACY, AND DOLLARIZATION ...
1 (May 2002), 1-17 CENTRAL BANK INDEPENDENCE, DEMOCRACY, AND DOLLARIZATION
ALLAN DRAZEN * Tel Aviv University, University of Maryland, NBER, and CEPR ...
[CITATION] Contagious currency crises
A Drazen - College Park: Center for International Economics, …, 1997
Stabilization programs in open economies typically consist of two stages. In the first stage
the rate of currency devaluation is reduced, but the fiscal adjustment does not eliminate the
fiscal deficit which causes growth of debt and loss of reserves, making a future policy ...
A Drazen… - 1986 - en.scientificcommons.org
Publikationsansicht. 59306646. Involuntary Unemployment and Aggregate Demand
Spillovers in an Optimal Search Model (1986). Drazen, Allan. Abstract. Published
in connection with a visit at the IIES. Details der Publikation. ...
A Drazen - Manuscript, University of Maryland, 2001 - biu.ac.il
ABSTRACT: I present a model of political pressure on the Central Bank for higher monetary
expansion. Since accommodating monetary policy is worth more to the politician in election
years than non-election years, the amount of pressure differs over the electoral cycle. This ...
A Drazen - Journal of African economies, 2008 - CSAE
Abstract It is argued that the same basic building blocks of political economy models are
relevant for developing and developed economies, though the policy questions, key political
mechanisms and specific models may differ. Towards this end, this paper first sets out a ...
[CITATION] Demographic Transition in a dual Economy
C Azariadis… - Unpublished Paper, 1990
A Drazen - International Economic Review, 1985 - JSTOR
Aggregate unemployment and output data in the United States in the 1970's and early
1980's suggest two basic questions. First, why has the unemployment rate remained so high
on average during this period? Second, why has the natural rate of unemployment ...
Abstract: High interest rates to defend the exchange rate signal that a government is
committed to fixed exchange rates, but may also signal weak fundamentals. We test the
effectiveness of the interest rate defense by disaggregating into the effects on future ...
[CITATION] Political Economics in Macroeconomics
A Drazen - Princenton, New Jersey, 2000
A Brender… - 2007 - nber.org
When democracy is new, it is often fragile and not fully consolidated. We investigate how the
danger of a collapse of democracy may affect fiscal policy in new democracies in
comparison to countries where democracy is older and often more established. We argue ...
G Bertola… - Capital mobility: the impact on …, 1994 - books.google.com
In 1991-2 there has been a significant change in capital inflows into Latin America. In the
mid-1980s capital flows into the 10 countries that make up South America averaged 8 billion
dollars a year; they rose to 20 billion dollars in 1990 and to 40 billion dollars in 1991. ...
[CITATION] Political budget cycles without deficits: expenditure composition effects
A Drazen… - Journal of the Japanese and International …, 2006 - Elsevier
High interest rates to defend the exchange rate signal that a government is committed to
fixed exchange rates, but may also signal weak fundamentals. We test the effectiveness of
the interest rate defense by disaggregating into the effects on future interest rates ...
[CITATION] Where Does the Political Business Cycle Really Come From?
A Brender… - Journal of Monetary Economics, 2005
[CITATION] Can exchange rate freezes induce business cycles
A Drazen - Unpublished manuscript, University of Maryland, 1990
A Drazen - The Quarterly Journal of Economics, 1985 - qje.oxfordjournals.org
Abstract A general model of optimal factor accumulation over an infinite horizon is presented
in which the steady state depends on initial conditions and on the history of the system. In
contrast to conventional results, any change in initial conditions or any temporary shock in ...
A Brender… - Comparative Economic Studies, 2007 - palgrave-journals.com
Abstract We review research on political budget cycles across countries, including recent
findings that they are a phenomenon of new democracies and are statistically insignificant in
old, established democracies. We then consider what may account for this and review ...
[CITATION] Monetary policy, seigniorage, and capital controls in an open economy
A Drazen - An European Central Bank, 1989 - Cambridge: Cambridge University …
A Drazen… - Economics Letters, 1987 - Elsevier
Abstract This study provides a theory of indexation to reconcile empirical findings that
unanticipated inflation raises the dispersion of price changes among subaggregates while it
lowers that of wage changes. Evidence on the relation between inflation and the ...
A Brender… - 2012 - papers.ssrn.com
Abstract: While economists argue that lower budget deficits are required in the developed
countries, there is a widely held perception that expansionary fiscal policy helps incumbents
to get reelected, an assumption that underlies the view that political budget cycles are ...
[CITATION] Essays on the Theory of Inflation
A Drazen - … Ph. D. dissertation, Massachusetts Institute of …, 1976
We present a bargaining model of the interaction between a government and interest groups
in which, unlike most existing models, neither side is assumed to have all the bargaining
power. The government finds it optimal to constrain itself in the use of transfer policies to ...
A Drazen… - European Economic Review, 1988 - ideas.repec.org
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view it first. Information about this may be contained in the File-Format links below. In case of
further problems read the IDEAS help page. Note that these files are not on the IDEAS site ...
Abstract We present a model of Political Budget Cycles in which incumbents influence voters
without changing overall expenditures or deficits. They do so by targeting government
spending to specific groups of voters at the expense of other voters or other expenditures. ...
[CITATION] The variable employment elasticity hypothesis: theory and evidence
A Drazen, DS Hamermesh, NP Obst… - 1982 - … , Faculty of Social Sciences, Tel-Aviv …
C Azariadis… - Revista de análisis economico, 1993 - econweb.umd.edu
Abstract: M osi theories of economic growth ignore determinants of growth in population.
The common assumption of constant population growth is strikingly inconsistent with the
data, which reveals a logistic pattern of population growth, the acceleration often ...
[CITATION] Future Stabilization Policies and Inflation
E Helpman,
A Drazen… - 1986 - Foerder Institute for Economic …
[CITATION] A Simple Test of the Effect of Exchange Rate Defense
A Drazen… - 2005 - working paper, University of …
A Drazen - Cycles and Chaos in Economic Equilibrium, 1992 - books.google.com
MODELS OF economic activity with frictions in coordinating trading have been shown to be
capable of generating multiple steady states.[Diamond (1982) is the pioneering work. See
Drazen (1987a) for a general discussion.] Less work has been done on out-of-steady- ...
A Drazen - World Development, 1982 - Elsevier
Abstract Unemployment in many less developed countries is characterized by a significant
urban-rural wage differential coexisting with high urban unemployment. This may be
consistent with optimization when there is imperfect information about a worker's ability, ...
[CITATION] A Rational Expectations Keynesian Model: With Price Flexibility
A Drazen… - 1985 - Foerder Institute for Economic …
A Brender… - The American Economic Review, 2009 - JSTOR
What economic policies can a government use to try to prevent a reversion to autocracy?
One answer to this question begins with the argument that the threat to democracy comes
from elites? the army, groups such as the wealthy who benefitted most under the old ...
[CITATION] The Persistence of Unemployment in a Dynamic Insider-Outsider Model
A Drazen… - 1990 - University of Stockholm, Institute for …
A Drazen… - 2008 - faculty.chicagobooth.edu
Abstract We present a model of political budget cycles in which incumbents gain votes by
targeting government spending to specific groups of voters at the expense of other voters or
other expenditures. Each voter faces a signal extraction problem: being targeted with ...
Abstract: We consider a bargaining model of the interaction between a government and
interest groups in which, unlike existing models, neither side is assumed to have all the
bargaining power. The government will then find it optimal to constrain itself in the use of ...
We analyze how uncertainty about when information about future returns to a project may be
revealed affects investment. While'good news' about future returns boosts investment,'good
news about news'(that is news that information may arrive sooner) is shown to depress ...
D Allan - Princeton, NJ: Princeton, 2000 - en.scientificcommons.org
Abstract This major text will have an enormous impact on students and professionals in
political science as well as economics, redefining how decision makers on several
continents think about the full range of macroeconomic issues and informing the ...
[CITATION] Interest Rate Defence against Speculative Attacks: An Asymmetric Information Model
A Drazen - NBER Working Paper, 1998
A large body of empirical work has demonstrated that higher inflation, especially when it is
unexpected, leads to greater dispersion in the distribution of price changes across
subaggregates. A sparse and more recent literature suggests exactly the opposite effects ...
[CITATION] Reconciling fiscal conservatism and political fiscal cycles. University of Maryland
A Drazen… - 2003 - mimeo
[CITATION] Twenty-five years of political business cycles
A Drazen - NBER macroeconomics annual, 2001
A Brender… - 2005 - econ.tau.ac.il
Abstract Recent research finds that political budget cycles are predominantly a phenomenon
of new democracies, but also indicates that even in these countries higher deficits in election
years do not help incumbents to get reelected. We suggest that the higher election year ...
A Brender… - 2009 - nber.org
Since a key function of competitive elections is to allow voters to express their policy
preferences, one might take it for granted that when leadership changes, policy change
follows. Using a dataset we created on the composition of central government ...
A Drazen - … -Rochester Conference Series on Public Policy, 1992 - econpapers.repec.org
... EconPapers has moved to http://EconPapers.repec.org! Please update your bookmarks.
Problems of government accounting: A comment. Allan Drazen (). Carnegie-Rochester
Conference Series on Public Policy, 1992, vol. 37, issue 1, pages 85-92. ...
[CITATION] The Political Budget Cycle in Colombia
A Drazen… - 2002 - working paper, University of …
A Drazen - The Economic Journal, 2007 - Wiley Online Library
What are the economic determinants of the transition from authoritarian to democratic rule
and democratic consolidation (the process by which, in the oft-quoted phrase of Linz and
Stepan (1996, p. 5),'democracy has become ''the only game in town''… when no ...
[CITATION] Elhanan Helpman 'Stabilization with Exchange Rate Management Under Uncertainty,'
A Drazen - 1988 - E. Helpman, A. Razin, and E. Sadka, …
[CITATION] Capital controls as a signal
L Bartolini… - American Economic Review, 1996
[CITATION] Do Distortionary Taxes Induce Policies Biased Towards Inflation?: A Microeconomic Analysis
A Cukierman,
A Drazen… - 1987 - Foerder Institute for Economic …
[CITATION] Policy signaling in the open economy
[CITATION] Inflationary consequences of uncertain Macroeconomic Policies
A Drazen, E Helpman… - 1985 - Foerder Institute for Economic …
[CITATION] Monetary Policy, Seigniorage, and Capital Controls in an Open Economy, in a European Central Bank?
A Drazen - 1989 - Cambridge University Press: …
[CITATION] Increasing returns and technical progress in tax collection
A Drazen… - 1983 - … , Faculty of Social Sciences, Tel-Aviv …
A Drazen - Economics Letters, 1979 - Elsevier
Abstract It is demonstrated that, because of learning-by-doing in the production process,
transitory phenomena, such as market disequilibrium, can permanently affect long-run
production techniques and the steady-state path of capital accumulation.
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