New research by Andreas Müller, a lecturer who joins our Department of Economics this term, and co-authors observes that government debt grew during the Republican administrations of Reagan and both Bushes, while it fell during all previous Democratic presidents after World War II.
Wed 8 Nov 17
Andreas graduated with a PhD from the University of Zurich in December 2013 and served as Assistant Professor at the University of Oslo from 2013 to 2017.
He has a broad research interest in macroeconomics with a focus on dynamic public finance, economic growth and development, and dynamic political economy. He will teach the modules, International Money and Finance and Topics in Macroeconomics.
In the paper, Andreas observes a pattern in Europe where the right has often proved less fiscally responsible in practice than the left. He further points out in careful empirical work that for the period 1950 to 2007 that when a shift to the right occurs government debt tends to increase, not decrease. This is completely contrary to claims, for example those presented recently by Republicans critical of the Obama administration, that left leaning parties are fiscally irresponsible when in power
Andreas goes on to develop a theoretical framework for understanding this pattern as the result of differing preferences across the political spectrum that have implications for how much parties care about future spending. Given that much of the rhetoric in this area is very loose, a main contribution of the paper is to formalise the argument sufficiently that one can identify on which assumptions it is based. This forms a solid basis for future work in this area of political economy.