This paper explores the theoretical foundations of electoral cycles in macroeconomic policy variables, such as taxes, government spending, and money growth. The authors argue that these cycles can be modeled as an equilibrium signaling process driven by temporary information asymmetries. The government, which has more current information on its performance, uses this advantage to signal its competence to voters. Incumbents are most likely to cheat when their private information is extremely favorable or unfavorable. The paper also examines the impact of changes in the incumbent party's popularity on policy cycles, finding that an increase in popularity does not necessarily dampen the cycle. The analysis is based on a model where voters' expectations are influenced by known party characteristics, past observations of competency shocks, and the government's tax bill. The paper concludes by discussing the implications of the model for empirical research and potential extensions.This paper explores the theoretical foundations of electoral cycles in macroeconomic policy variables, such as taxes, government spending, and money growth. The authors argue that these cycles can be modeled as an equilibrium signaling process driven by temporary information asymmetries. The government, which has more current information on its performance, uses this advantage to signal its competence to voters. Incumbents are most likely to cheat when their private information is extremely favorable or unfavorable. The paper also examines the impact of changes in the incumbent party's popularity on policy cycles, finding that an increase in popularity does not necessarily dampen the cycle. The analysis is based on a model where voters' expectations are influenced by known party characteristics, past observations of competency shocks, and the government's tax bill. The paper concludes by discussing the implications of the model for empirical research and potential extensions.