The Effect of the U.S. Economy on Presidential Elections, 1828-2008

Abstract

In the growing literature on presidential elections, economic circumstances have a privileged position. Nearly all of the models designed to predict the 2008 presidential election included one or more aggregate economic indicators or aggregate public evaluations of economic circumstances. The influence of the economy on presidential elections has been well documented. However, citing the substantial growth of the federal government and the enactment of legislation such as the Employment Act of 1946, the majority of the literature focuses on the effect of the economy only on modern presidents. While some scholars study the influence of the economy on presidents starting in 1913 or even the late nineteenth century, few, if any, scholars study the effect of the economy on earlier presidents. This paper examines the extent to which the U.S. economy affected presidential election from the early 19th century to the present day. Arguing that the federal government’s role in the national economy changed dramatically during the middle of the twentieth century, we present evidence that price stability was positively associated with incumbent party electoral success from 1828 to 1948 and that income growth was directly related to incumbent party electoral success in the subsequent years. While the nature of the economic effects on presidential elections have varied over time, economic conditions have clearly played a role in national elections since the early years of the American republic.

Keywords: presidential elections, macroeconoimc politics, political economy