POLITICAL BUSINESS CYCLE: The notion that a business cycle is caused by elected government leaders who manipulate the economy to achieve personal political goals -- that is, to remain in office. The leaders stimulate the economy leading up to an election, creating a business-cycle expansion that ensures (they hope) their re-election, then induce a business-cycle contraction after the election to correct problems created by pre-election stimulation. See also | business cycle | investment | expansion | contraction | peak | trough | shortage | surplus | unemployment | inflation | fiscal policy | monetary policy | stabilization policies | investment business cycle | circular flow | balanced budget | money supply rule |
