Politico-Economic Models: Problems and Prospects

The Rise of the Military and the Prospects of Politico-Economic Developments in Egypt

Although the 2011 uprisings in Egypt led to the fall of Hosni Mubarak, they have not yet been able to change the nature of the country’s political system. A year after the country’s first non-military president took office, Egypt’s political situation became more or less similar to the way it had been before 2011. The structure of the relationship between the state and the society in Egypt, hig...

Politico - Economic Equilibrium Andeconomic

Elections , Capital Flows , and Politico Economic Equilibria

We study an open economy where a pro labor and a pro business candidate compete in an election. The winner chooses taxes, which affect investment returns. Electoral outcomes depend on the size of the foreign debt, but the debt itself reflects expectations about the election. The resulting interaction is novel and has several implications. Elections are associated with increased volatility. Poli...

Crisis in Venezuela: A Politico Economic Understanding

More than five years down the line Venezuela had been slipping into an economic cri-sis. An economy wholly dependent on the sale of oil and no diversification of economic production is sure to face such a crisis. The fluctuation in oil prices is sure to hurt the market and the economy. To make matters worse, Venezuela now faces a political crisis with two individuals claiming themselves to be P...

A Politico-Economic Model of Public Expenditure and Income Taxation

We model the political process as consisting of voting on the issue considered salient, public expenditure, with a subsequent consensus over size of government and income taxation. We prove that for each majoritarian choice there is a unique consensus policy on progressivity and government size. We empirically validate the implication that the sign of the relationship between inequality and pro...