Presidents and the U.S. Economy: An Econometric Exploration

Alan Blinder and Mark Watson

No 20324, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The U.S. economy has grown faster--and scored higher on many other macroeconomic metrics--when the President of the United States is a Democrat rather than a Republican. For many measures, including real GDP growth (on which we concentrate), the performance gap is both large and statistically significant, despite the fact that postwar history includes only 16 complete presidential terms. This paper asks why. The answer is not found in technical time series matters (such as differential trends or mean reversion), 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 TFP performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future. Many other potential explanations are examined but fail to explain the partisan growth gap.

JEL-codes: E30 E60 (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-his, nep-mac and nep-pol
Note: EFG
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Published as Alan S. Blinder & Mark W. Watson, 2016. "Presidents and the US Economy: An Econometric Exploration," American Economic Review, American Economic Association, vol. 106(4), pages 1015-45, April.

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Related works:
Journal Article: Presidents and the US Economy: An Econometric Exploration (2016)
Working Paper: Presidents and the U.S. Economy: An Econometric Exploration (2014)
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