Economy Grows Faster Under Democratic Presidents

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Addie
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Economy Grows Faster Under Democratic Presidents

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[link]New York Times,http://www.nytimes.com/2014/08/06/upsho ... dents.html[/link]





Luck and a Little Mystery: The Economy Grows Faster Under Democratic Presidents ...





This incident came to mind upon reading the provocative [link]new paper,http://www.princeton.edu/~mwatson/paper ... ly2014.pdf[/link] by the economists Alan Blinder and Mark Watson that rigorously examines how the economy has performed under presidents since the 1940s. Their main questions are: Which party’s presidents preside over better economies and why?





Their answer to the first question is clear: The American 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. ...





The two looked at key macroeconomic variables averaged over 64 years (16 four-year terms), from Harry Truman to Barack Obama. Mr. Blinder and Mr. Watson focus mostly on the 1.8 percent annual difference in real G.D.P. growth. That is, over the full study, real G.D.P. growth averaged 3.33 percent per year. But under Democratic presidents the economy grew 4.35 percent and under Republicans 2.54 percent.





Under Democratic presidents, the economy also spent fewer quarters in recession; added more jobs and more hours worked; and posted larger declines in unemployment and higher corporate profits than under their Republican counterparts. Stock market returns were a lot higher under Democrats as well, but because equity markets are so volatile, that difference is not statistically significant. (By the way, since March 2009, the S.&P. stock index is up 160 percent).
"The very least you can do in your life is to figure out what you hope for." - Barbara Kingsolver

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