Presidents and the economy
Date posted: January 3, 2014
When discussing the economy, people will often credit or blame the president for economic trends. But how much control does the president really have over the economy? N.C. State University economist Mike Walden responds.
“And this is really an interesting, as well as very important, question, and it’s the subject of a new research paper done by two very well-known economists at Princeton (University). What they did is they looked at the post-World War II economy and how the economy performed in terms of macro numbers under presidents who were Democrat or Republican.
“The general conclusion they came to is that the macro economic numbers were much better under Democratic presidents than Republican presidents, but they were quick to say, upon further investigation, that very little of that (could you) apply to particular presidents. Instead, what they found was that differences of oil price trends, of the degree of innovations and inventions in the private sector, and consumer confidence really were the big factors explaining that difference.
“However, those factors collectively explained only half the difference between the performance of the economy under Democratic presidents (and) Republican presidents. Therefore, the mystery is still open. Why does the economy seem to perform differently under different kinds of presidents?”
Category: Economic Perspective