Regulatory Cycles: A Political Economy Theory

• In Event: Models of Electoral Politics

Brief Overview

Why is financial regulation pro-cyclical? We show that electoral incentives lead politicians to amplify changes in public opinion by over-regulating during downturns and under-regulate during booms.

Authors

• Pooya Almasi, Georgetown University

• Jihad Dagher

• Carlo Prato, Columbia University in the City of New York