Price Controls and Electoral Cycles

24 Pages Posted: 15 Feb 2006

See all articles by Pierre-Richard Agenor

Pierre-Richard Agenor

The University of Manchester - School of Social Sciences

Carlos Asilis

affiliation not provided to SSRN

Date Written: November 1993

Abstract

This paper studies the interactions between electoral considerations and the imposition of price controls by opportunistic policymakers. The analysis shows that a policy cycle emerges in which price controls are imposed in periods leading to the election, and removed immediately afterwards. The shape of the cycle is shown to depend on the periodicity of elections, the relative weight attached by the public to inflation as opposed to the macroeconomic distortions associated with price controls, the nature of wage contracts, and the degree of uncertainty about the term in office.

JEL Classification: C72, D72, E64

Suggested Citation

Agenor, Pierre-Richard and Asilis, Carlos, Price Controls and Electoral Cycles (November 1993). IMF Working Paper No. 93/89, Available at SSRN: https://ssrn.com/abstract=883823

Pierre-Richard Agenor (Contact Author)

The University of Manchester - School of Social Sciences ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

Carlos Asilis

affiliation not provided to SSRN

No Address Available

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