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The article examines the partisan effect of electoral terms and changes in government administrations on U.S. economic conditions. The two partisan models, which represent conservative and liberal parties, calculate the political-business cycle and political-economic interaction in terms of exogenous and endogenous variables. One model is based on the assumption that the government risks losing power. The other assumption is that the government calls for an election. The study found that real output is affected when the probability of a regime change is nonzero. The Phillips curve, rational expectation of inflation, the probability of an election or coup d'état, and the prediction of when recessions would occur in conservative governments are mentioned.

Developing a lobbying model of repeated agency, we explain previously unexplained features of the real-world lobbying industry. Lobbying is divided between direct representation by special interests to policymakers, and indirect representation where special interests employ professional intermediaries called commercial lobbyists to lobby policymakers on their behalf. Our analytical structure allows us to explain several trends in lobbying. For example, using the observation that in the United States over the last 20 years, policymakers have spent an increasing amount of their time fundraising as opposed to legislating, we are able to explain why the share of commercial lobbyist activity in total lobbying has risen dramatically and now constitutes over 60% of the total. The key scarce resource in our analysis is policymakers' time. Policymakers allocate this resource via implicit repeated agency contracts that are used to incent special interests and commercial lobbyists to provide a mix of financial contributions and information on policy proposals. These implicit agency contracts solve both an information problem in the presence of unverifiable policy information and a contracting problem in the absence of legal enforcement. These repeated relationships, that are often described using the pejorative term 'cronyism' in the popular press, may in certain circumstances be welfare improving. ( JEL D72, D82, H1, P16) [ABSTRACT FROM AUTHOR]