IDEAS home Printed from https://ideas.repec.org/a/kap/pubcho/v162y2015i1p119-133.html
   My bibliography  Save this article

Voting and the economic cycle

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11127-014-0205-z
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11127-014-0205-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2008. "A Retrospective Look at the U.S. Productivity Growth Resurgence," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 3-24, Winter.
    2. Marianne Baxter & Robert G. King, 1999. "Measuring Business Cycles: Approximate Band-Pass Filters For Economic Time Series," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 575-593, November.
    3. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    4. Henrik Jordahl, 2006. "An economic analysis of voting in Sweden," Public Choice, Springer, vol. 127(3), pages 251-265, June.
    5. Andrew Leigh, 2009. "Does the World Economy Swing National Elections?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(2), pages 163-181, April.
    6. Alberto Alesina & Nouriel Roubini, 1992. "Political Cycles in OECD Economies," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(4), pages 663-688.
    7. Mark Gertler & Jordi Gali & Richard Clarida, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December.
    8. Peltzman, Sam, 1990. "How Efficient Is the Voting Market?," Journal of Law and Economics, University of Chicago Press, vol. 33(1), pages 27-63, April.
    9. Stigler, George J, 1973. "General Economic Conditions and National Elections," American Economic Review, American Economic Association, vol. 63(2), pages 160-167, May.
    10. Nannestad, Peter & Paldam, Martin, 1994. "The VP-Function: A Survey of the Literature on Vote and Popularity Functions after 25 Years," Public Choice, Springer, vol. 79(3-4), pages 213-245, June.
    11. Dopke, Jorg & Pierdzioch, Christian, 2006. "Politics and the stock market: Evidence from Germany," European Journal of Political Economy, Elsevier, vol. 22(4), pages 925-943, December.
    12. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65(2), pages 135-135.
    13. Michael Lewis-Beck & Mary Stegmaier, 2013. "The VP-function revisited: a survey of the literature on vote and popularity functions after over 40 years," Public Choice, Springer, vol. 157(3), pages 367-385, December.
    14. Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1.
    15. Nannestad, Peter & Paldam, Martin, 1997. "The grievance asymmetry revisited: A micro study of economic voting in Denmark,1986-1992," European Journal of Political Economy, Elsevier, vol. 13(1), pages 81-99, February.
    16. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
    17. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(1), pages 83-116.
    18. Markus Prior, 2005. "News vs. Entertainment: How Increasing Media Choice Widens Gaps in Political Knowledge and Turnout," American Journal of Political Science, John Wiley & Sons, vol. 49(3), pages 577-592, July.
    19. Kayser, Mark Andreas & Peress, Michael, 2012. "Benchmarking across Borders: Electoral Accountability and the Necessity of Comparison," American Political Science Review, Cambridge University Press, vol. 106(3), pages 661-684, August.
    20. Everts, Martin, 2006. "Duration of Business Cycles," MPRA Paper 1219, University Library of Munich, Germany.
    21. Mark Gertler & Jordi Gali & Richard Clarida, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December.
    22. Robert J. Blendon, 1997. "Bridging the Gap between the Public's and Economists' Views of the Economy," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 105-118, Summer.
    23. Bloom, Howard S. & Price, H. Douglas, 1975. "Voter Response to Short-Run Economic Conditions: the Asymmetric Effect of Prosperity and Recession," American Political Science Review, Cambridge University Press, vol. 69(4), pages 1240-1254, December.
    24. Jonathan Temple, 1999. "The New Growth Evidence," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 112-156, March.
    25. William D. Nordhaus, 1975. "The Political Business Cycle," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(2), pages 169-190.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Björn Kauder & Niklas Potrafke, 2022. "Rewarding conservative politicians? Evidence from voting on same-sex marriage," Public Choice, Springer, vol. 191(1), pages 161-172, April.
    2. Gebhard Kirchgässner, 2016. "Voting and Popularity," CESifo Working Paper Series 6182, CESifo.
    3. David Mitchell, 2023. "Covid-19 and the 2020 presidential election," Constitutional Political Economy, Springer, vol. 34(2), pages 188-209, June.
    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. 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.
    7. Adam, Antonis & Karanatsis, Konstas, 2016. "Sovereign Defaults and Political Regime Transitions," MPRA Paper 69062, University Library of Munich, Germany.
    8. Antoine Auberger, 2020. "The impact of economic and political factors on popularity for France (1981- 2017)," Working Papers hal-02501677, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gebhard Kirchgässner, 2016. "Voting and Popularity," CREMA Working Paper Series 2016-08, Center for Research in Economics, Management and the Arts (CREMA).
    2. John Maloney & Andrew Pickering, "undated". "Voting and the macroeconomy: separating trend from cycle," Discussion Papers 11/14, Department of Economics, University of York.
    3. Bennett, Daniel L. & Long, Jason T., 2019. "Is it the economic policy, stupid? Economic policy, political parties & the gubernatorial incumbent advantage," European Journal of Political Economy, Elsevier, vol. 58(C), pages 118-137.
    4. Gikas A. Hardouvelis & Dimitrios D. Thomakos, 2007. "Consumer Confidence and Elections," Working Paper series 42_07, Rimini Centre for Economic Analysis.
    5. Berlemann, Michael & Enkelmann, Sören, 2014. "The economic determinants of U.S. presidential approval: A survey," European Journal of Political Economy, Elsevier, vol. 36(C), pages 41-54.
    6. Reinhard Neck & Friedrich Schneider, 2024. "The popularity function: a spurious regression? The case of Austria," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(1), pages 298-329, February.
    7. Antoine Auberger, 2020. "The impact of economic and political factors on popularity for France (1981- 2017)," Working Papers hal-02501677, HAL.
    8. Kouvavas, Omiros, 2013. "Political Budget Cycles Revisited, the Case for Social Capital," MPRA Paper 57504, University Library of Munich, Germany, revised 15 Sep 2013.
    9. Sumru Altug & Bilin Neyapti & Mustafa Emin, 2012. "Institutions and Business Cycles," International Finance, Wiley Blackwell, vol. 15(3), pages 347-366, December.
    10. Ansgar Belke & Clemens Domnick & Daniel Gros, 2017. "Business Cycle Synchronization in the EMU: Core vs. Periphery," Open Economies Review, Springer, vol. 28(5), pages 863-892, November.
    11. Graciela L. Kaminsky & Carmen M. Reinhart & Carlos A. Végh, 2005. "When It Rains, It Pours: Procyclical Capital Flows and Macroeconomic Policies," NBER Chapters, in: NBER Macroeconomics Annual 2004, Volume 19, pages 11-82, National Bureau of Economic Research, Inc.
    12. Stavros Degiannakis & David Duffy & George Filis, 2014. "Business Cycle Synchronization in EU: A Time-Varying Approach," Scottish Journal of Political Economy, Scottish Economic Society, vol. 61(4), pages 348-370, September.
    13. Furceri, Davide & Karras, Georgios, 2006. "Are the new EU members ready for the EURO?: A comparison of costs and benefits," Journal of Policy Modeling, Elsevier, vol. 28(1), pages 25-38, January.
    14. Nikolaos Antonakakis & Ioannis Chatziantoniou & George Filis, 2016. "Business Cycle Spillovers in the European Union: What is the Message Transmitted to the Core?," Manchester School, University of Manchester, vol. 84(4), pages 437-481, July.
    15. Dopke, Jorg & Pierdzioch, Christian, 2006. "Politics and the stock market: Evidence from Germany," European Journal of Political Economy, Elsevier, vol. 22(4), pages 925-943, December.
    16. Degiannakis, Stavros & Duffy, David & Filis, George & Livada, Alexandra, 2016. "Business cycle synchronisation in EMU: Can fiscal policy bring member-countries closer?," Economic Modelling, Elsevier, vol. 52(PB), pages 551-563.
    17. Gourley, Patrick & Khamis, Melanie, 2023. "It is not easy being a Green party: Green politics as a normal good," European Journal of Political Economy, Elsevier, vol. 76(C).
    18. Davide Furceri & Georgios Karras, 2008. "Is the Middle East an Optimum Currency Area? A Comparison of Costs and Benefits," Open Economies Review, Springer, vol. 19(4), pages 479-491, September.
    19. Andrew Hughes Hallett & Jan Libich, 2007. "Fiscal-monetary Interactions: The Effect of Fiscal Restraint and Public Monitoring on Central Bank Credibility," Open Economies Review, Springer, vol. 18(5), pages 559-576, November.
    20. Potrafke, Niklas, 2017. "Partisan politics: The empirical evidence from OECD panel studies," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 712-750.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:pubcho:v:162:y:2015:i:1:p:119-133. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.