Searching for political business cycles in Germany

One result of the revitalised literature on political business cycles is that there are signs in German data that elections and ideology have an impact. However, using monthly data for the period 1950-1989, and standard methods of time series analysis, we reject both the Nordhaus hypothesis of opportunistic cycles and the partisan approaches by Hibbs and Alesina. We show that some results are sensitive to the assumption of stationarity. There are signs of policy cycles in M1. It is hard, though, to bring this in line with the Rogoff hypothesis of rational opportunistic cycles because of the German institutional setting.