publication . Article . Preprint . 2011

The Political Business Cycle: New Evidence from the Nixon Tapes

Burton A. Abrams; James L. Butkiewicz;
Open Access
  • Published: 01 Jan 2011 Journal: Journal of Money, Credit and Banking, volume 44, pages 385-399 (issn: 0022-2879, Copyright policy)
  • Publisher: Wiley
Abstract
Drawing from the personal tape recordings made during the presidency of Richard Nixon, we uncover and report in this paper new evidence that Nixon manipulated Arthur Burns and the Federal Reserve Bank into creating a political business cycle that helped secure Nixon’s reelection victory in 1972. Nixon understood the risks that his desired monetary policy imposed, but chose to trade longer-term economic costs to the economy for his own short-term political benefit.
Subjects
free text keywords: Monetary Policy; Political Business Cycle, Economics and Econometrics, Accounting, Finance, Economic cost, Chose, Politics, Victory, Business cycle, Economics, Presidency, Macroeconomics, Monetary policy, jel:E5, jel:E3, jel:E58
Related Organizations

Abrams, Burton A., “How Richard Nixon Pressured Arthur Burns: Evidence from the Nixon Tapes,” Journal of Economic Perspectives 20(4), Fall 2006, 177-188.

Alesina, Alberto, Roubini, Nouriel; with Gerald D. Cohen, Political Cycles and the Macroeconomy (Cambridge and London: MIT Press, 1997).

Board of Governors of the Federal Reserve System, Federal Reserve Bulletin, 1972 (March), A17.

Burns, Arthur, Prosperity without Inflation (New York: Fordham University Press, 1957).

Haldeman, H. R., The Haldeman Diaries: Inside the Nixon White House (New York: G. P. Putnam, 1994).

Kozicki, Sharon and Tinsley, P.A. “Perhaps the 1970s FOMC Did What it Said it Did,” Journal of Monetary Economics, 58(6), September 2009, 842-855. [OpenAIRE]

Nordhaus, William D., “The Political Business Cycle,” Review of Economic Studies, 42(2), April 1975, 169-190.

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