This paper presents a rational political budget cycle model for an open economy, in which devaluations are delayed in the pre-election period so as to increase the electoral chances of the party in office. By concentrating on closed economies, previous political cycle models had overlooked the...

This paper presents a rational political budget cycle model for an open economy, in which devaluations are delayed in the pre-election period so as to increase the electoral chances of the party in office. By concentrating on closed economies, previous political cycle models had overlooked the...

This paper studies the mechanisms behind party polarization in the US Congress. The model generates a link between the initial composition of the parties, the behavior of new interest groups and the pattern and level of polarization along the new policy dimension (e.g., environment). Our...