What Does the State of the Economy Imply for the Presidential Election? July 23, 2008 It is generally accepted that the state of the economy leading up to a presidential election can have an important bearing on its outcome. Indeed, this point was driven home most famously by Clinton campaign aide James Carville in 1992 with his "It's the Economy, Stupid!" admonition to stay focused on the key issue in the campaign. In the current election season, virtually every poll has indicated that the economy is by far the number one concern for voters. In 2004 we first reported on a model that does a reasonably good job forecasting the share of the popular vote won by the incumbent party. Our point of departure was widely known model proposed by Ray Fair, in which voters make their decision based on the state of the economy and a few "political" factors. We improved on that model (in a statistical sense) and spun out its prediction in the 2004 election. This Macro Focus explores the implications of the MA and Blue Chip consensus forecasts for the outcome of the 2008 presidential election.
ELECTION UPDATES
October Update October 20th, 2008
Using our recent estimates as input, Macroeconomic Advisers' (MA) Presidential election model projects that Senator Obama will win 54.3% of the two-party popular vote, defeating Senator McCain by a margin of 8.6%. This margin is consistent with several current national tracking polls, which have shown a recent surge for the Democratic candidate.
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