Political price cycles in regulated industries : theory and evidence /
This paper develops a model of political regulation in which politicians set the regulated price in order to maximize electoral support by signaling to voters a pro-consumer behavior. Political incentives and welfare constraints interact in the model, yielding an equilibrium in which the real price...
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| Main Authors: | , |
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| Format: | Electronic eBook |
| Language: | English |
| Published: |
[Washington, D.C.] :
International Monetary Fund, IMF Institute,
2006.
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| Series: | IMF working paper ;
WP/06/260. |
| Subjects: | |
| Online Access: |
Full text (Emmanuel users only) |
| Summary: | This paper develops a model of political regulation in which politicians set the regulated price in order to maximize electoral support by signaling to voters a pro-consumer behavior. Political incentives and welfare constraints interact in the model, yielding an equilibrium in which the real price in a regulated industry may fall in periods immediately preceding an election. The paper also provides empirical support for the theoretical model. Using quarterly data from 32 industrial and developing countries over 1978-2004, we find strong statistical and econometric evidence pointing toward the existence of electoral price cycles in gasoline markets. |
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| Physical Description: | 1 online resource (22 pages) |
| Format: | Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. |
| Bibliography: | Includes bibliographical references. |
| ISBN: | 1282448315 9781282448315 9781451909739 145190973X 1462301363 9781462301362 1452758204 9781452758206 9786613821508 6613821500 |
| ISSN: | 2227-8885 ; |
| Language: | English. |
| Reproduction Note: | Electronic reproduction. |
| Source of Description, Etc. Note: | Print version record. |
| Action Note: | digitized |