The political business cycle under rational voting behavior

This essay argues that politically motivated business cycles could persist in a democratic society even if the electorate votes in a rational, fully informed manner, provided that government policymakers have the means to systematically generate macroeconomic fluctuations. This cyclic outcome reflects the pReferences of an electorate that is composed of imperfectly altruistic voters belonging to different overlapping generations. Since each generation has a different horizon over which it would like to have elected politicians provide an optimal economic policy plan, an intergenerational conflict of interests situation arises. This conflict is placed into an explicit political context, whereby cycles become generated under the institutional constraint of periodic elections.     

Denmark

European Journal of Political Research -     

Death caused by drug addiction: a review of the experiences in Hamburg and the situation in the Federal Republic of Germany in comparison with the literature

Based on criminological experiences and pathomorphological, serological and toxicological studies of more than 300 fatalities, an overview is given of drugs, their intravenous abuse and drug deaths in Hamburg and the Federal Republic of Germany. The number of drug deaths has increased dramatically in Hamburg, where there were more than 50 cases each year in 1987 and 1988. In the F.R.G. approximately 400 cases are registered per annum. The percentage of female intravenous drug abusers is growing and the age of the decedents is increasing. The mean was formerly 25 years, but is now 30 years. Among the histopathological findings, foreign-body granulomas are of special value; infectious diseases, especially hepatitis B and HIV-infection, have to be investigated serologically and morphologically. The prevalence of HIV-1 antibodies among drug deaths in Hamburg is approximately 15%, in comparison with approximately 50% in Berlin. The "supply" of heroin has apparently become so copious that nearly all deaths are caused by overdosage with this substance. An international agreement about a definition of a drug death is a prerequisite for nationwide analyses.     

Time-consistent monetary policy under output persistence

This note merges the fact that real activity is persistent with a Barro-Gordon type model of endogenous monetary policy. It shows that persistence crucially affects policy choices. This applies in non-cooperative games with a finite horizon, and in games with an infinite horizon. Always, enforceable inflation announcements move higher when output persistence increases. Policymakers who discount future utility by 10% annually produce about ten times as much inflation under near-hysteresis as in a natural-rate scenario. A change in the policymaker's time preference may affect inflation both ways, depending on present time preference and persistence.