Politics

The U.S. Economy Does Better Under Democratic Presidents — Is it Just Luck?

[The Washington Post]

Since World War II, there’s been a strikingly consistent pattern in American politics: The economy does much better when a Democrat is in the White House.

More specifically, since 1947, the U.S. economy has grown at an average real rate of 4.35 percent under Democratic presidents and just 2.54 percent under Republicans:

(Note: Truman's growth rate drops to 5 percent if you include his unelected term from 1947-1949.)

(Note: Truman’s growth rate drops to 5 percent if you include his unelected term from 1947-1949.)

Why the big gap? One possible explanation is that Democratic policies are better for economic growth. Another is that Republican policies are better for growth — but there’s a time lag, so Democrats tend to benefit.

Alternatively, perhaps Democrats simply have better economic luck. That third theory is one favored by economists Alan Blinder and Mark Watson in their new working paper, “Presidents and the Economy: A Forensic Investigation”. They argue that random economic fluctuations best explain the differences in growth between 1947 and 2013, and not which party happens to hold the White House.

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