These empirical measures are then used by empirical researchers, who have provided a series of facts about the correlates of inequality. Perhaps the most famous relationship is the Kuznets (1955) curve shown in Figure 34.1. Income inequality first rises and then falls as countries get richer. This c...
more »Most studies of inequality focus on income, but inequality can also be calculated based on wealth, consumption, or any other reasonable proxy for well-being. Wealth or consumption have the advantage that they are less subject to shortterm income shocks, and the inequality of lifetime earnings is pro...
more »It is common to portray democratic capitalism as a system where markets allocate income according to efficiency while governments redistribute income according to political demand. This suggests a convenient intellectual division of labor between economists and political scientists, but it is based...
more »As we have seen, some of the literature has dealt with the complexity of democratic politics by using highly simplifying model assumptions. The Meltzer–Richard model is a prominent example. Such simplifications lead to clear and deductively valid inferences, but they often come at a considerable c...
more »As noted in the introduction, distributive politics is inherently multidimensional because a pie can be divided along as many dimensions as there are political agents vying for a piece. It is therefore hard to understand why politicians should constrain themselves to contest a single policy instrume...
more »Median voter models are very simple to use, but as the Robin Hood paradox suggests, they do not provide much leverage on explaining the observed variance in redistributive politics. Power resources theory points to one potential source of such variation that has been subject to much research: govern...
more »In a seminal article, Przeworski and Wallerstein (1982) give a simple answer to the question of why the poor don’t soak the rich. Any attempt at radical redistribution, or socialism, they argue, would be met by massive disinvestment and possibly violence by the upper classes. So even if the poor w...
more »Political factors within nations give rise to two basic types of pressures for—or against—coordination and cooperation in the international arena. On the one hand, exchange rate policies involve trade-offs with domestic distributional implications. International coordination or cooperation may n...
more »International monetary regimes tend toward one of two ideal types. The first is a fixed rate system, in which currencies are tied to each other at publicly announced rates. Some fixed rate systems involve a common link to a commodity such as gold or silver; others peg to a national currency such as...
more »Macroeconomic voting divides naturally into two main views defined by voters’ time horizons: prospective and retrospective. In the prospective view, the expected future relative performance of contestants for office is all that matters. Prospective valuation is akin to the pricing of financial ass...
more »Other empirical studies of RPT report more mixed results. Sheffrin (1989), for example, finds US monetary cycles, but not significantly consistent with RPT in the USA or elsewhere. Using over 100 years of American data, Klein (1996) finds political events associated with ends of slumps and booms, co...
more »Unlike the electoral cycles case, empirical support for partisan cycles seemed strong, so no particular empirical puzzle motivated RE partisan theory. Rather, Alesina’s (1987, 1988) rational partisan theory (RPT) filled theoretical needs, providing a framework logically consistent with modern RE e...
more »In partisan models of political economics, candidates contest and voters adjudicate elections in partisan terms. Parties cultivate ties to different voter groups and nurture reputations for policy-making that favors those groups. Parties and voters value these ties and reputations, so incumbents con...
more »One component of context conditionality that is especially neglected in electoral cycle studies is that of electoral challengers, who play little direct role in most models. Higher-quality challengers, for instance, may lead incumbents to expect closer elections, yielding greater electioneering in q...
more »Viewing this evidentiary pattern, economists naturally questioned the adaptive expectations and exploitable Phillips-curves assumptions. Voters and economic actors can easily foresee elections and policy-makers’ incentives, so electoral cycles should not exist or should have no real effects under...
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