POLITICAL PARTIES IN POWER AND U.S. ECONOMIC PERFORMANCE

William T. Chittenden

The International Journal of Business and Finance Research, 2020, vol. 14, issue 2, 21-36

Abstract: This study examines the simultaneous interaction between political control of the White House and both chambers of Congress and the impact of those combinations on various measures of economic activity in the U.S. Past economic growth is not significantly different under Republican and Democratic presidential administrations. Nor does the party that controls the House of Representatives appear to have a significant impact on economic growth. However, growth has been strongest when Republicans control the Senate. Non-farm payrolls and industrial production grow faster under Democratic Presidents, while higher inflation and unemployment are generally observed when Democrats control the Senate or House. Republican Presidents are in office for a significantly greater number of months when the economy is in a recession. The same is true when Democrats are in charge of the Senate or House. The U.S. economy appears to have the strongest performance under the combination of a Democratic President with a Republican controlled Senate and House, and the weakest economic performance is generally under a Republican President with a Senate controlled by Democrats and a Republican controlled House

Keywords: Political Business Cycle; Leading Indicators; Economic History (search for similar items in EconPapers)
JEL-codes: D72 E32 N12 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:14:y:2020:i:2:p:21-36

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