Economic policy and the presidential election cycle in stock returns

Ray Sturm ()

Journal of Economics and Finance, 2013, vol. 37, issue 2, 200-215

Abstract: Many papers in the academic literature have documented a “Presidential Election” cycle in stock returns. Prior literature also documents that stock returns appear to be influenced by economic policy. The goal of this study is to examine the tools of fiscal and monetary policy to test for the presence of a presidential election cycle. The findings strongly suggest that the presidential election cycle in stock returns and the government’s economic policy influence on stock returns are two separate phenomena. Moreover, it is much more likely that stock returns are influencing economic policy rather than the other way around. However, the findings also suggest that tax legislation may drive the Presidential Election Cycle. Copyright Springer Science+Business Media, LLC 2013

Keywords: Stock Returns; President; Election Cycle; Economic Policy; Tax Legislation (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s12197-011-9179-6

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