The interaction between economics and politics: modelling cycles

Abstract. In this article simulation results are used to analyze the capacity of a general politico-economic model, developed by one of the authors, to generate cycles of various lengths. The model describes behaviour of individuals and organizations in the economic as well as the political sphere. The interaction between both spheres gives rise to short term (business) cycles as well as long term (Kondratieff) cycles. The analyses concentrate on the effect variations in the political sector (regarding, e.g., party identification on non-economic grounds, the sensitivity of voters, and the discount parameter for past economic results) have on the cycles found.