CAN THE PRESIDENT REALLY AFFECT ECONOMIC GROWTH? PRESIDENTIAL EFFORT AND THE POLITICAL BUSINESS CYCLE |
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| Authors: | Chris Rohlfs Ryan Sullivan Robert McNab |
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| Institution: | 1. 1‐212‐762‐02761‐212‐507‐4288;2. Vice President of Risk Management, Morgan Stanley, New York, NY;3. 1‐515‐451‐94071‐831‐656‐2139;4. Assistant Professor of Economics, U.S. Naval Postgraduate School, Monterey, CA 93943 |
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| Abstract: | Presidential elections are often seen as referendums on the health of the economy; however, little evidence exists on the president's ability to influence gross domestic product (GDP). This study examines the effect of the incentive to be reelected and the resulting increase in presidential effort on GDP growth. Growth is found to rise in reelection years for first‐term presidents after 1932 and to fall in election years before 1932, when reelection was uncommon, and for second‐term presidents generally. This effect is largest for high‐quality presidents—who probably have the highest return to effort—and is spread across multiple sectors of the economy. (JEL D78, D72, E32, J24) |
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