This paper examines the relationship between elections and macroeconomic policy cycles, arguing that electoral cycles in taxes, government spending, and money growth can be modeled as an equilibrium signaling process. The authors show that these cycles arise from temporary information asymmetries, where the government has more current information on its performance in providing national defense than voters. Incumbents are least likely to cheat when their private information is either extremely favorable or extremely unfavorable. An exogenous increase in the incumbent party's popularity does not necessarily imply a damped policy cycle. The paper presents a model where voters' expectations depend on known characteristics of the two parties, past observations on competency shocks, and the government's most recent tax bill. The model shows that voters can infer the incumbent's information from the tax bill, and that there is no "cheating" during off-election periods. During election periods, the equilibrium has specific characteristics, such as the incumbent party not cheating if its competency shock is the lowest possible. The paper also considers infinite-horizon equilibria, where the two political parties have infinite time horizons. If their discount rates are low enough, there can be an equilibrium in which there is no macroeconomic policy cycle. The paper discusses the implications of the model for empirical analysis and policy, showing that the model can explain why incumbents may engage in short-term policy actions that are not optimal in the long run. The authors conclude that the model provides a useful framework for understanding the relationship between elections and macroeconomic policy cycles.This paper examines the relationship between elections and macroeconomic policy cycles, arguing that electoral cycles in taxes, government spending, and money growth can be modeled as an equilibrium signaling process. The authors show that these cycles arise from temporary information asymmetries, where the government has more current information on its performance in providing national defense than voters. Incumbents are least likely to cheat when their private information is either extremely favorable or extremely unfavorable. An exogenous increase in the incumbent party's popularity does not necessarily imply a damped policy cycle. The paper presents a model where voters' expectations depend on known characteristics of the two parties, past observations on competency shocks, and the government's most recent tax bill. The model shows that voters can infer the incumbent's information from the tax bill, and that there is no "cheating" during off-election periods. During election periods, the equilibrium has specific characteristics, such as the incumbent party not cheating if its competency shock is the lowest possible. The paper also considers infinite-horizon equilibria, where the two political parties have infinite time horizons. If their discount rates are low enough, there can be an equilibrium in which there is no macroeconomic policy cycle. The paper discusses the implications of the model for empirical analysis and policy, showing that the model can explain why incumbents may engage in short-term policy actions that are not optimal in the long run. The authors conclude that the model provides a useful framework for understanding the relationship between elections and macroeconomic policy cycles.