Political business cycle theory predicts that every politician with power tries to stimulate the economy before elections, and empirically this is overwhelming true, yet the puzzle is why it fools anyone when it should be transparently obvious; Rogoff's 1987 paper modeled this as a signaling problem where voters understand they're being deceived but vote for the incumbent anyway.

factualpending

Speaker

Kenneth Rogoff

Evidence Quote

The question is why does it fool anyone? Everybody should understand why that's going on.

Source

Kenneth Rogoff on Monetary Moves, Fiscal Gambits, and Classical Chess | Conversations with TylerMercatus Center
Created: 8/11/2026, 7:10:38 AM

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