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Rivalry, Reciprocity, and the Dynamics of Presidential-Congressional Institution Building Krause, George Uploaded 08-20-1998 Keywords Institution Building Presidential-Congressional Relations Prisoner's Dilemma Nonmyopic Equilibria Theory of Moves Johansen Cointegration Procedure FIML Vector Error Correction Mechanisms (VECMs) Innovation Accounting Abstract A central feature of the development of the presidential and congressional branches has been the process of institution building. This phenomenon represents the size and scope of a branch's formal institutional apparatus that is reflected by the resources it utilizes for operational and functional purposes. In this study, a simple dynamic Prisoner's Dilemma game-theoretic model, based on the Theory of Moves (Brams 1994), is set forth to explain this process. This theoretical model produces two Nonmyopic Equilibria (NMEs): (1) a Contractionary Equilibrium where both the president and Congress expend fewer resources; and (2) an Expansionary Equilibrium where each institution expends greater resources. The theoretical predictions derived from this positive model suggest that variations in the institutional expenditures by each branch will exhibit a stable long-run equilibrium relationship that is consistent with these NME's. Using constant-dollar annual data on Executive Office of the President and Legislative Branch expenditures for the 1939-1997 period, a Vector Error Correction Mechanism (VECM) model, that is derived from the game-theoretic model noted above, is employed to empirically account for both short-run and long-run movements as well as long-run equilibrium relations. The statistical evidence supports the predictions of the theoretical model. Specifically, the historical evolution of presidential and congressional institution building represents a conflict situation where neither institution has a permanent advantage over the other due to its equal power and farsightedly rational behavior. Contrary to existing research on this topic, the empirical findings reveal that both presidential and congressional efforts at institution building do not just emanate from within each respective branch, but instead are very responsive to one another with respect to these activities. This, in turn, suggests that causal (temporal) sequence of institution building is in stark contrast from the conventional wisdom of an "opportunistic" presidency that exploits Congress.

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Recent Developments in Econometric Modelling: A Personal Viewpoint Maddala, G.S. Uploaded 07-17-1997 Keywords dynamic panel data models dynamic models with limited dependent variables unit roots cointegration VAR's Bayesian Abstract The quotation above (more than three thousand years ago) essentially summarizes my perception of what is going on in econometrics. Dynamic economic modelling is a comprehensive term. It covers everything except pure cross-section analysis. Hence, I have to narrow down the scope of my paper. I shall not cover duration models, event studies, count data and Markovian models. The areas covered are: dynamic panel data models, dynamic models with limited dependent variables, unit roots, cointegration, VAR’s and Bayesian approaches to all these problems. These are areas I am most familiar with. Also, the paper is not a survey of recent developments. Rather, it presents what I feel are important issues in these areas. Also, as far as possible, I shall relate the issues with those considered in the work on Political Methodology. I have a rather different attitude towards econometric methods which my own colleagues in the profession may not share. In my opinion, there is too much technique and not enough discussion of why we are doing what we are doing. I am often reminded of the admonition of the queen to Pollonius in Shakespeare’s Hamlet, “More matter, less art.”

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Fractional Integration Methods in Political Science Box-Steffensmeier, Janet M. Uploaded 05-02-1999 Keywords Fractional integration fractional cointegration congressional approval Abstract Controversies in researching political time series often revolve around the best characterization of the series, i.e., whether a series is stationary or integrated. By using a fractional integration approach, one can avoid this controversy. Fractionally integrated series are mean-reverting, but decay at different rates than a stationary series. Theoretical reasons may also lead one to expect a fractionally integrated series. Estimation of the d parameter in an ARFIMA (p, d, q) model is no longer difficult and multivariate extensions are proving useful. Using fractionally integrated methods can lead to substantive and methodological insights about political processes. We estimate d for congressional approval and economic expectations data from Durr, Gilmour, and Wolbrecht (1997) and test for fractional cointegration.

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Cointegration and Military Rivalry: Some Evidence on 5 Modern Rivalries Gerace, Michael P. Uploaded 11-29-1999 Keywords cointegration military rivalry military expenditures arms race time series Johansen Method Abstract his article investigates the possibilities for stability in arms races, with its starting point being Richardson's discussion of stability conditions. Most discussions of stability focus on whether armaments levels become stable, but there could also be a stable relationship between the armaments of rivals. By employing a time series approach, the behavioral aspects of a model and underlying stability conditions can be related clearly to data characteristics, which clarifies the possibilities for a model. The military expenditures of 5 sets of rivals are then investigated for stationarity, the nature of the trend, and for cointegration. Whether the data are stationary and, if not, the nature of the trend, have implications for what kind of stability can exist over the long-run (or whether the models are explosive). The Johansen method is used for the cointegration tests, and VEC models are evaluated for two cases. While the results are mixed, there is some support for cointegrating relationships among rivals, there is no indication of stability in the level of expenditures or of explosive instability over the long-run.