Mortgage market credit conditions and U.S. Presidential elections

Alexis Antoniades and Charles W. Calomiris

European Journal of Political Economy, 2020, vol. 64, issue C

Abstract: Voters punish incumbent Presidential candidates for contractions in the county-level supply of mortgage credit during market-wide contractions of credit, but do not reward them for expansions in mortgage credit supply in boom times. Our primary focus is the Presidential election of 2008, which followed an unprecedented swing from very generous mortgage underwriting standards to a severe contraction of mortgage credit. Voters responded to the credit crunch by shifting their support away from the Republican Presidential candidate in 2008. That shift was large and particularly pronounced in states that typically vote Republican, and in swing states. Without it McCain would have received half the votes needed in nine crucial swing states to reverse the outcome of the election. We extend our analysis to the Presidential elections from 1996 to 2012 and find that voters only react to contractions, not expansions, of credit, and reactions are similar for Democratic and Republican incumbent parties.

Keywords: Mortgage credit supply; Voting (search for similar items in EconPapers)
JEL-codes: D72 E51 G01 G21 L51 N22 N42 P16 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:64:y:2020:i:c:s0176268020300574

DOI: 10.1016/j.ejpoleco.2020.101909

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