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Political leaders and macroeconomic expectations: Evidence from a global survey experiment

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  • Boumans, Dorine
  • Gründler, Klaus
  • Potrafke, Niklas
  • Ruthardt, Fabian

Abstract

Can political leaders influence macroeconomic expectations on a global scale? We design a large-scale survey experiment among influential economic experts working in more than 100 countries and use the 2020 US presidential election as a quasi-natural experiment to identify the effect of the US incumbent change on global macroeconomic expectations. We find large effects of the change in US leadership on growth expectations of international experts. The effect works through both economic (more positive expectations about trade) and psychological (irrational exuberance at the defeat of an unpopular but powerful leader) channels. Our findings suggest important political spillover effects in the formation of macroeconomic expectations.

Suggested Citation

  • Boumans, Dorine & Gründler, Klaus & Potrafke, Niklas & Ruthardt, Fabian, 2024. "Political leaders and macroeconomic expectations: Evidence from a global survey experiment," Journal of Public Economics, Elsevier, vol. 235(C).
    • Handle: RePEc:eee:pubeco:v:235:y:2024:i:c:s0047272724000768
    DOI: 10.1016/j.jpubeco.2024.105140
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    More about this item

    Keywords

    US presidential elections; Politicians; Economic expectations; Economic experts; Survey experiment;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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