Partisan bias in inflation expectations
Oliver Bachmann (oliver.bachmann@zhaw.ch),
Klaus Gründler (gruendler@ifo.de),
Niklas Potrafke and
Ruben Seiberlich
Additional contact information
Oliver Bachmann: ZHAW School of Management and Law
Public Choice, 2021, vol. 186, issue 3, No 17, 513-536
Abstract:
Abstract We examine partisan bias in inflation expectations. Our dataset includes inflation expectations of the New York Fed’s Survey of Consumer Expectations over the period June 2013 to June 2018. The results show that inflation expectations were 0.46% points higher in Republican-dominated than in Democratic-dominated US states when Barack Obama was US president. Compared to inflation expectations in Democratic-dominated states, inflation expectations in Republican-dominated states declined by 0.73% points when Donald Trump became president. We employ the Blinder–Oaxaca decomposition method to disentangle the extent to which political ideology and other individual characteristics predict inflation expectations: around 25% of the total difference between inflation expectations in Democratic-dominated versus Republican-dominated states is based on how partisans respond to changes in the White House’s occupant (partisan bias). The results also corroborate the belief that voters’ misperceptions of economic conditions decline when the president belongs to the party that voters support.
Keywords: Inflation expectations; Partisan bias; Political ideology; Voters’ perceptions; Blinder–Oaxaca; US president (search for similar items in EconPapers)
JEL-codes: C13 D72 E31 P44 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (13)
Downloads: (external link)
http://link.springer.com/10.1007/s11127-019-00741-0 Abstract (text/html)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Partisan Bias in Inflation Expectations (2019)
Working Paper: Partisan Bias in Inflation Expectations (2019)
Working Paper: Partisan bias in inflation expectations (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:kap:pubcho:v:186:y:2021:i:3:d:10.1007_s11127-019-00741-0
Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/11127/PS2
DOI: 10.1007/s11127-019-00741-0
Access Statistics for this article
Public Choice is currently edited by WIlliam F. Shughart II
More articles in Public Choice from Springer
Bibliographic data for series maintained by Sonal Shukla (sonal.shukla@springer.com) and Springer Nature Abstracting and Indexing (indexing@springernature.com).