Market Observations

Effects of Economic Outcomes on Presidential Elections

Market Observations White Paper
October 2020

Authors & Contributors

Aggregate economic outcomes have been identified as important drivers of votes for the US president. A repeated finding is that economic growth in the near window before the election rewards the party of the incumbent president.

Empirical models of US presidential outcomes rely on a measure of the economy’s momentum in advance of the election. Real GDP, employment and real disposable income all perform about as equally well in describing that momentum from 1948 to 2016, so that the choice among them is more a matter of researcher’s preference than sharp distinction.