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From Polls to Policies: The Economic Impact of Elections

Author

Listed:
  • Das, Abhirup
  • Rajan, Bhargav Raman
  • Santosh Bandi, Syam Sai
  • Udandarao, Vikranth

Abstract

Elections play an essential role in shaping domestic and global economies. This review paper examines the effect of election cycles on economic outcomes, mainly focusing on the United States while analysing other countries, including China, India, and other developing countries. The paper explores how different political strategies and policies influence economic indicators such as the Gross Domestic Product, unemployment rate, inflation, trade and nominal income. Analysis reveals that electoral pressures often drive short-term economic manipulation at the expense of long-term fiscal health. The paper states the influence of leadership changes on market volatility and trade and fiscal policies using statistical insights and models. The paper goes over the implications of elections and the need for policies prioritising long-term fiscal health over electoral gains.

Suggested Citation

  • Das, Abhirup & Rajan, Bhargav Raman & Santosh Bandi, Syam Sai & Udandarao, Vikranth, 2025. "From Polls to Policies: The Economic Impact of Elections," MPRA Paper 123801, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:123801
    as

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    File URL: https://mpra.ub.uni-muenchen.de/123801/1/MPRA_paper_123801.pdf
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    References listed on IDEAS

    as
    1. Scott R. Baker & Nicholas Bloom & Steven J. Davis, 2016. "Measuring Economic Policy Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(4), pages 1593-1636.
    2. 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).
    3. Scott R. Baker & Aniket Baksy & Nicholas Bloom & Steven J. Davis & Jonathan Rodden, 2020. "Elections, Political Polarization, and Economic Uncertainty," Working Papers 2020-145, Becker Friedman Institute for Research In Economics.
    4. De Benedictis-Kessner, Justin & Warshaw, Christopher, 2020. "Accountability for the Local Economy at All Levels of Government in United States Elections," American Political Science Review, Cambridge University Press, vol. 114(3), pages 660-676, August.
    5. Khemani, Stuti, 2004. "Political cycles in a developing economy: effect of elections in the Indian States," Journal of Development Economics, Elsevier, vol. 73(1), pages 125-154, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Elections; Fiscal Health; Electoral Gain; Political Strategies; Policies; Voter Accountability;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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