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The Economic Determinants of U.S. Presidential Approval - A Survey

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  • Soeren Enkelmann

    (Department of Economics, Leuphana University Lueneburg, Germany)

  • Michael Berlemann

    (Helmut-Schmidt-University Hamburg, Germany)

Abstract

Even after four decades of research it remains unclear, whether presidential popularity depends on the state of the economy. While about half of all studies for the United States find a significant effect of unemployment and inflation on presidential popularity, the others do not. Additional economic issues have rarely been studied. In this survey article we study the likely causes for the inconclusive findings. While various factors have an influence on the results, especially the choice of the sample period is of crucial importance. While in the very long run we find unemployment, inflation and the budget deficit to have a robust effect on presidential approval, this holds not true for shorter sub-periods. This result might indicate that the popularity function is instable over time. However, the findings might also be taken as an indication that the most often employed linear estimation approach is inadequate. Further research on these issues is necessary.

Suggested Citation

  • Soeren Enkelmann & Michael Berlemann, 2013. "The Economic Determinants of U.S. Presidential Approval - A Survey," Working Paper Series in Economics 272, University of Lüneburg, Institute of Economics.
    • Handle: RePEc:lue:wpaper:272
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    2. Berlemann, Michael & Eckmann, Timur & Eurich, Marina, 2024. "Make it Burn? Presidential Approval, Disaster Aid and Wildfires," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302434, Verein für Socialpolitik / German Economic Association.
    3. Michael Berlemann & Sören Enkelmann & Torben Kuhlenkasper, 2015. "Unraveling the Relationship Between Presidential Approval and the Economy: A Multidimensional Semiparametric Approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 30(3), pages 468-486, April.
    4. Berlemann, Michael & Enkelmann, Soeren & Kuhlenkasper, Torben, 2012. "Unraveling the complexity of US presidential approval: A multi-dimensional semi-parametric approach," HWWI Research Papers 118, Hamburg Institute of International Economics (HWWI).
    5. Myriam Gómez-Méndez & Erwin Hansen, 2021. "Economic policy uncertainty and presidential approval: Evidence from Latin America," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-17, March.
    6. Albornoz, Facundo & Hauk, Esther, 2014. "Civil war and U.S. foreign influence," Journal of Development Economics, Elsevier, vol. 110(C), pages 64-78.
    7. Montone, Maurizio, 2022. "Does the U.S. president affect the stock market?," Journal of Financial Markets, Elsevier, vol. 61(C).
    8. Rodrigo Cerda & Natalia Gallardo & Rodrigo Vergara, 2017. "Political approval ratings and economic performance: evidence from Latin America," Estudios Públicos 23, Centro de Estudios Públicos.
    9. Rangan Gupta & Christian Pierdzioch & Aviral K. Tiwari, 2024. "Gasoline Prices and Presidential Approval Ratings of the United States," Working Papers 202427, University of Pretoria, Department of Economics.
    10. Gebhard Kirchgässner, 2016. "Voting and Popularity," CESifo Working Paper Series 6182, CESifo.
    11. Soeren Enkelmann, 2013. "Government Popularity and the Economy First Evidence from German Micro Data," Working Paper Series in Economics 274, University of Lüneburg, Institute of Economics.
    12. Liu, Yang & Shaliastovich, Ivan, 2022. "Government policy approval and exchange rates," Journal of Financial Economics, Elsevier, vol. 143(1), pages 303-331.
    13. Sören Enkelmann, 2014. "Government popularity and the economy: first evidence from German microdata," Empirical Economics, Springer, vol. 46(3), pages 999-1017, May.
    14. 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).
    15. Ji Won Jung & Jinhwan Oh, 2020. "Determinants of presidential approval ratings: Cross-country analyses with reference to Latin America," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 23(3), pages 251-267, September.
    16. Bahram Adrangi & Joseph Macri, 2019. "Does the Misery Index Influence a U.S. President’s Political Re-Election Prospects?," JRFM, MDPI, vol. 12(1), pages 1-11, February.
    17. Balaguer-Coll, Maria Teresa & Brun-Martos, María Isabel & Forte, Anabel & Tortosa-Ausina, Emili, 2015. "Local governments' re-election and its determinants: New evidence based on a Bayesian approach," European Journal of Political Economy, Elsevier, vol. 39(C), pages 94-108.
    18. Sedef Sen & Murat Donduran, 2017. "Does stock market performance affect the government satisfaction rating in the UK?," Empirical Economics, Springer, vol. 53(3), pages 999-1009, November.
    19. Daesik Kim & Chung Joo Chung & Kihong Eom, 2022. "Measuring Online Public Opinion for Decision Making: Application of Deep Learning on Political Context," Sustainability, MDPI, vol. 14(7), pages 1-16, March.
    20. Tarkom, Augustine & Yang, Lukai, 2024. "Presidential economic approval rating and trade credit," International Review of Financial Analysis, Elsevier, vol. 93(C).
    21. Paulo Reis Mourao & Alina Irina Popescu, 2021. "Discussing the political survival of Romanian ministers since 1989—Do economic conditions matter?," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(1), pages 63-93, January.

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    More about this item

    Keywords

    presidential popularity; approval; unemployment; inflation;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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