Paths to a political business cycle

Is there such a thing in India?

How does our thinking about macroeconomics change in an election year? Public choice theory is the idea that the state is made up of individuals that maximise their self-interest. Elections are an important consideration for politicians. The idea of the “political business cycle” envisages certain kinds of policy action prior to and after elections, which create impulses upon the macroeconomy. Our ability to understand these phenomena helps us better interpret economic conditions and developments.

The biggest levers of macroeconomics, fiscal and monetary policy, are the first port of call in thinking about the political business cycle. In advanced economies, patterns of