Legislation and Political Business Cycles.

This paper offers further evidence on the political business cycle hypothesis by testing for a relationship between aggregate economic activity and the legislative output of the US Congress from its first assembly in 1789 through the biennial session ending in 1980. The advantage of this approach is that it captures the fiscal initiatives necessary to spur expansionary or contractionary pressures as well as government's off-budget intrusions into the private economy. The empirical results from three alternative tests offer little evidence that the legislature attempts to engineer macroeconomic events so as to enhance the reelection prospects of incumbent politicians. [ABSTRACT FROM AUTHOR]