[Jeffrey Frankel] The election-devaluation cycle
The proposition that major currency devaluations are more likely to come immediately after, rather than before, an election is being tested anew. In the biggest voting year in history, the implications could be far-reaching. Economists will recall the Nobel laureate economist William D. Nordhaus’ influential 1975 paper, “The Political Business Cycle.” According to Nordhaus, in the year leading up to an election, governments are more inclined to pursue fiscal and monetary expans
May 1, 2024