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Presidents and the US Economy: An Econometric Exploration

Author(s): Blinder, Alan S; Watson, Mark W

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Abstract: The US economy has performed better when the president of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance. For many measures, including real GDP growth (our focus), the performance gap is large and significant. This paper asks why. The answer is not found in technical time series matters 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 total factor productivity (TFP) performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near-term future.
Publication Date: Apr-2016
Citation: Blinder, Alan S, Watson, Mark W. (2016). Presidents and the US Economy: An Econometric Exploration. American Economic Review, 106 (4), 1015 - 1045. doi:10.1257/aer.20140913
DOI: doi:10.1257/aer.20140913
ISSN: 0002-8282
Pages: 1015 - 1045
Type of Material: Journal Article
Journal/Proceeding Title: American Economic Review
Version: Final published version. Article is made available in OAR by the publisher's permission or policy.

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