RT Generic
T1 The Democrat-Republican growth gap paradox
A1 Ferreira, José Luis
A1 Hidalgo-Pérez, Manuel
A1 Rubio-Castaño, Carmen
A2 Universidad Carlos III de Madrid. Departamento de Economía, 
AB Economic performance has been historically better under Democrat presidents compared to Republican ones. This gap has not yet been fully explained appealing to better management or luck. In fact, the economic cycles under one group of administrations or the other are quite similar. Blinder and Watson (2016) provide the best attempt so far at solving the paradox, but can explain only half of the gap. Drawing from them, and using a different method to account for the initial conditions of each presidential term, we are able to show that the phase of the economic cycle at the different elections are correlated to the party of the president. We also find ample evidence suggesting that there is a subtle causality: when the unemployment is high, the probability of a person voting for a Democrat president increases, thus causing Democrats being elected more often at the end of a recession and the beginning of a recovery. This, and not the difference in competence dealing with the economic cycles, is enough to close the gap.
SN 2340-5031
YR 2018
FD 2018-09
LK https://hdl.handle.net/10016/27445
UL https://hdl.handle.net/10016/27445
LA eng
NO Ferreira: Department of Economics, Universidad Carlos III de Madrid. The author thanks financial support bySpanish Ministerio de Economía, Industria y Competitividad project ECO2015-66383-P.
DS e-Archivo
RD 30 jun. 2024