Presidents and the US Economy: An Econometric Exploration

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 answe...

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Bibliographic Details
Published in:The American economic review 2016-04, Vol.106 (4), p.1015-1045
Main Authors: Blinder, Alan S., Watson, Mark W.
Format: Article
Language:English
Subjects:
Econometrics
Economic conditions
Economic growth
Economists
Election results
GDP
Gross Domestic Product
Macroeconomics
Political parties
Presidency
Presidential elections
Productivity
Statistical analysis
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Summary: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.
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.20140913