The hypothesis of political business cycles is based on the assumption that a vertical Phillips curve always holds.

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The hypothesis of political business cycles states that incumbent politicians manipulate economic policy to stimulate the economy before an election in order to increase their chances of winning. This theory does not require the assumption that a vertical Phillips curve always holds. Rather, it suggests that policy changes may lead to shifts in the Phillips curve, depending on the specific policy implemented.

The Hypothesis of Political Business Cycles Is Based on the Assumption