Conclusions and Epilogue
Recent politico-institutional approaches to the theory of economic policy emphasize the incentives of rational and maximizing policymakers in explaining movements in macroeconomic variables. From these approaches a positive theory of economic policy in alternative institutional environments is developed from which in turn certain normative suggestions regarding political and economic institutional designs are deduced. Central to this perspective is the general assumption that policymakers respond to incentives and constraints just like the rest of the economic agents. As a consequence, the actual policies of government give rise to political cycles which on the basis of the primary motivational force involved are distinguished into opportunistic and partisan cycles.
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