Partisan impacts on the economy
Subtitle: evidence from prediction markets and close elections
By: by Erik Snowberg, Justin Wolfers, Eric Zitzewitz
Contributors: Wolfers, Justin
Series: Discussion paper -- no. 1996; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 1996
Publisher: IZA
Published: 2006
Place of publication: Bonn, Germany
Language: eng
Format: [electronic resource] :
Subjects: Presidents; Election; Economic forecasting
Description: "Political economists interested in discerning the effects of election outcomes on the economy have been hampered by the problem that economic outcomes also influence elections. We sidestep these problems by analyzing movements in economic indicators caused by clearly exogenous changes in expectations about the likely winner during election day. Analyzing high frequency financial fluctuations on November 2 and 3 in 2004, we find that markets anticipated higher equity prices, interest rates and oil prices and a stronger dollar under a Bush presidency than under Kerry. A similar Republican-Democrat differential was also observed for the 2000 Bush-Gore contest. Prediction market based analyses of all Presidential elections since 1880 also reveal a similar pattern of partisan impacts, suggesting that electing a Republican President raises equity valuations by 2-3 percent, and that since Reagan, Republican Presidents have tended to raise bond yields"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 3/2/2006.

Includes bibliographical references.

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