The "political business cycle", according to economist William Nordhaus, creates a situation in which political and bureaucratic incentives create artificial economic booms just before elections, with consequent and deleterious side effects after the ballots are counted. This work examines the issue of whether federal governmental structure inevitably leaves the U.S. economy exposed to unhealthy political influences.
Foreword / Axel Leijonhufvud xv Introduction and Summary / Patricia Dillon and Thomas D. Willett 1 Part One: The Political and Economic Causes of the Great Stagflation 1. Explaining the Great Stagflation: Toward a Political Economy Framework / Thomas D. Willett and King Banaian 35 2. Inflation and Politics: Six Theories in Search of Reality / William Mitchell 63 3. Models of the Political Process and Their Implications for Stagflation: A Public Choice Perspective / Thomas D. Willett and King Banaian 100 Appendix: An Overview of Political Business Cycles / King Banaian 116 4. The Keynesian Legacy: Does Countercyclical Policy Pay Its Way? / Thomas Mayer 129 5. Wage and Price Rigidities, Supply Restrictions, and the Problem of Stagflation / Gottfried Haberler 145 6. The Inflation Tax / J. Harold McClure Jr. and Thomas D. Willett 177 7. The Decline of Gold as a Source of U.S. Monetary Discipline / John Briggs, D. B. Christenson, Pamela Martin, and Thomas D. Willett 186 8. Inflation Hypothesis and Monetary Accommodation: Postwar Evidence from the Industrial Countries / Thomas D. Willett, King Banaian, Leroy O. Laney, Mohand Merzkani, and Arthur D. Warga 200 Part Two. The Political Business Cycle 9. Politico-Economic Models of Macroeconomic Policy: A Review of the Empirical Evidence / Friederich Schneider and Bruno S. Frey 239 10. Does the Political Business Cycle Dominate U.S. Employment and Inflation? Some New Evidence / Stephen E. Haynes and Joe Stone 276 11. Political Business Cycles and the Capital Stock: Variations on an Austrian Theme / Peter Lewin 294 Part Three. The Political Economy of Monetary Policy 12. Problems Inherent in Political Money Supply Regimes: Some Historical and Theoretical Lessons / Lawrence H. White 301 13. Two Monetary and Fiscal Policy Myths / Thomas Havrilesky 320 14. Monetary Policy: The Rhetoric versus the Record / Raymond E. Lombra 337 15. Politics and Monetary Policy / Nathaniel Beck 366 Part Four. Proposals for Reform 16. Evaluating Proposals fro Fundamental Monetary Reform / Thomas Mayer and Thomas D. Willett 398 17. Fiat Money and the Constitution: A Historical Review / Gregory B. Christainson 424 18. Monetary Confidence, Privately Produced Monies, and Domestic and International Monetary Reform / Michael Melvin 435 19. Depoliticizing the Supply of Money / Lawrence H. White 460 20. Fedbashing and the Role of Monetary Arrangements in Managing Political Stress / Edward J. Kane 479 21. Subordinating the Fed to Political Authorities Will Not Control Inflationary Tendencies / King Banaian, Leroy O. Laney, John McArthur, and Thomas D. Willett 490 Index 509