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Voting and the economic cycle

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  • John Maloney
  • Andrew Pickering

Abstract

Sophisticated voters assess incumbent competence by filtering out economic cycles (which they do not like) from trend growth (which they do). Naive voters on the other hand respond only to raw economic growth. This implies that voting in the aggregate should respond asymmetrically to the economic cycle. Upswings are rewarded by the naive, but punished by the sophisticated. Downswings are punished by all voters. Using an established dataset of over 400 general elections we find that the incumbent vote share (a) responds differently to trend growth than to the cycle, (b) does not respond significantly to positive variation in the economic cycle, and (c) responds significantly and negatively to negative realizations in the economic cycle. In contrast to standard formulations of the ‘grievance asymmetry’ this asymmetric vote response is found to be independent of trend growth. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • John Maloney & Andrew Pickering, 2015. "Voting and the economic cycle," Public Choice, Springer, vol. 162(1), pages 119-133, January.
    • Handle: RePEc:kap:pubcho:v:162:y:2015:i:1:p:119-133
    DOI: 10.1007/s11127-014-0205-z
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    Cited by:

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    2. David Mitchell, 2023. "Covid-19 and the 2020 presidential election," Constitutional Political Economy, Springer, vol. 34(2), pages 188-209, June.
    3. Gebhard Kirchgässner, 2016. "Voting and Popularity," CREMA Working Paper Series 2016-08, Center for Research in Economics, Management and the Arts (CREMA).
    4. Frank Bohn, 2018. "Political cycles: Beyond rational expectations," PLOS ONE, Public Library of Science, vol. 13(10), pages 1-23, October.
    5. Antoine Auberger, 2015. "The impact of economic and political factors on popularity for France (1981-2014)," Working Papers halshs-01264983, HAL.
    6. Adam, Antonis & Karanatsis, Konstas, 2016. "Sovereign Defaults and Political Regime Transitions," MPRA Paper 69062, University Library of Munich, Germany.
    7. Antoine Auberger, 2020. "The impact of economic and political factors on popularity for France (1981- 2017)," Working Papers hal-02501677, HAL.
    8. John Maloney & Andrew Pickering, 2018. "The Economic Consequences of Political Donation Limits," Economica, London School of Economics and Political Science, vol. 85(339), pages 479-517, July.

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    More about this item

    Keywords

    Economic voting; Competence; Political knowledge ; Asymmetric voting; D72;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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