Macroeconomics and political misuse: Interpreting economic policy

Abstract

The paper focuses the impact of political abuse of economic policy on macroeconomic results, as well as the macroeconomic models that investigate this impact. The paper also presents the development of modern macroeconomics, along with main changes in the way of creating economic policy. Two key political motives - opportunistic (to stay in power as long as possible) and partisan - to achieve ideological goals in the field of economics, are considered in the context of traditional models that assume naive voters and adaptive expectations, but also in the context of rational models that include rational voters and expectations. The paper also gives certain recommendations for overcoming the politically motivated behavior of economic policymakers.