Presidents and the US Economy: An Econometric Exploration
American Economic Review
vol. 106,
no. 4, April 2016
(pp. 1015-45)
(Complimentary)
Abstract
The US economy has performed better when the president of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance. For many measures, including real GDP growth (our focus), the performance gap is large and significant. This paper asks why. The answer is not found in technical time series matters nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the Democratic edge stems mainly from more benign oil shocks, superior total factor productivity (TFP) performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future. (JEL D72, E23, E32, E65, N12, N42)Citation
Blinder, Alan S., and Mark W. Watson. 2016. "Presidents and the US Economy: An Econometric Exploration." American Economic Review, 106 (4): 1015-45. DOI: 10.1257/aer.20140913Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- E23 Macroeconomics: Production
- E32 Business Fluctuations; Cycles
- E65 Studies of Particular Policy Episodes
- N12 Economic History: Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations: U.S.; Canada: 1913-
- N42 Economic History: Government, War, Law, International Relations, and Regulation: U.S.; Canada: 1913-