Economic Behavior in an Election Year

This research examines the economic behavior of selected macroeconomic variables during presidential election years. The macroeconomic variables of concern in this research are interest rates, governmental spending, investment, net exports, price levels, and money supply. The behavior of these variables is examined with respect to data for the inclusive period 1960 (first calendar quarter) to 1988 (second calendar quarter).

Methodologically, this research is performed within the framework of the ISLM Model. The ISLM model is so named for the two curves included in its structure. The IS curve reflects the "various combinations of national income and interest rates for which leakages will be equated with injections" (Gwartney, Stroup, and Studenmund, 1990, A14). The LM curve reflects the "combinations of interest rates and income levels that are consistent with equilibrium in the monetary sector" (Gwartney, Stroup, and Studenmund, 1990, A15).

Interest, in the early development period of capitalism, was regarded simply as the rate of return on capital invested (Ekelund and Hebert, 1990, p. 90). At this time, interest, as income on capital, was considered to be analogous to rent on land. As economic theory developed, however, the nature of interest, and the determinants of interest rates began to be perceived in more complex terms. Cl

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/ / | / / | / / | / / | Y1 / I | Y2 | | | | | | | | | 0  Savings and Investment ============================================================= Chart 2 Illustration of IS Curve Derives Through Combining Elements of the Loanable Funds and Keynesian Theories of Interest ============================================================= Rate of Interest "r" | | IS | | | | | | | | | | | | r1|  | | |
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Some common words found in the essay are:
Ekelund Hebert, TSLS Model, ISLM Model, | |, | | |, Keynesian Theories, Funds Theory, Various Theories, Federal Reserve, Kidwell Peterson, Money Supply, Model Assumptions, | /, / |, | / |, / | /, loanable funds, economic theory, gross national product, national product, gross national, tsls election consideration, hebert 1990, federal reserve, tsls election,
Approximate Word count = 4414
Approximate Pages = 18 (250 words per page)

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