Review real GDP, unemployment, inflation, and business cycle data.
Using presidential elections as a point of comparison, have incumbent
presidents tended to win reelection if the economy is strong and lose
if the economy is weak?

Dear mojito74,

All of the necessary data is published by the U.S. Census Bureau in a
series of PDF files and corresponding Excel spreadsheets on the
following webpage.

U.S. Census Bureau: Mini Historical Studies
http://www.census.gov/statab/www/minihs.html


First, the absolute values and relative increases in GDP from 1929
through 2002, expressed in both current and real dollars, are in a PDF
file at the following address.

U.S. Census Bureau: Mini Historical Studies: Gross Domestic Product
http://www.census.gov/statab/hist/HS-32.pdf


For employment statistics in the same period, we turn to this file.

U.S. Census Bureau: Mini Historical Studies: Employment Status of the
Civilian Population
http://www.census.gov/statab/hist/HS-29.pdf


Inflation is measured by relative change in the consumer price index,
the historical trends of which are reported here.

U.S. Census Bureau: Mini Historical Studies: Consumer and Gross
Domestic Price Indexes
http://www.census.gov/statab/hist/HS-36.pdf


There is a data set devoted to business cycles as defined by the
National Bureau of Economic Research.

U.S. Census Bureau: Mini Historical Studies: Business Cycle Expansions
and Contractions
http://www.census.gov/statab/hist/HS-37.pdf


Finally, the results of presidential elections over the past century
are at this location.

U.S. Census Bureau: Mini Historical Studies: Vote Cast for President
http://www.census.gov/statab/hist/HS-52.pdf


During the years for which we have full economic data, 19 presidential
elections were held, of which 11 were contested by an incumbent. The
incumbent won in 7 cases and lost in the remaining 4. For each
election that was contested by an incumbent, we have analyzed the
specified categories of data, observing the trend over the four years
prior to the election. In most cases, there is a clearcut trend, but
sometimes there are fluctuations within the period that make it
impossible to form an objective judgment. In the chart below, we
present our findings with the following legend. The plus symbol, "+",
denotes growth in the named category of economic data. The minus
symbol, "-", indicates a decline. The tilde, "~", means that no clear
trend can be observed.

For the GDP and business-cycle categories, an increase is obviously a
positive indicator. To make this harmonious with the labor figures, we
have chosen to show a result for employment instead of unemployment,
since an increase in employment is certainly positive. The situation
is more difficult with inflation, since a healthy economy experiences
a gradual rise in the consumer price index, whereas a decline in
prices, or deflation, is a reliable sign of recession. There is such a
thing as excessive inflation, so we hold to the rule that inflation
between 0% and 5% is good, whereas deflation, or inflation over 5%, is
bad. As for the business cycles, we consider that growth takes place
between a trough and a peak, while decline takes place between a peak
and a trough.

In the final column of our chart, we mark whether the hypothesized
trend, according to which the incumbent wins in a strong economy and
loses in a weak economy, is confirmed by the figures.


year   incumbent    result      GDP      employ.  prices   bus. cyc.   trend?
====   =========    ======      ===      =======  ======   =========   ======

1932   Hoover       loss        -        -        -        -           yes

1936   Roosevelt    win         +        +        +        +           yes

1940   Roosevelt    win         ~        -        -        +           no

1944   Roosevelt    win         +        +        +        +           yes

1964   Johnson      win         +        ~        ~        +           yes

1972   Nixon        win         ~        +        ~        +           yes

1976   Ford         loss        -        -        +        -           yes

1980   Carter       loss        -        +        -        +           ?

1984   Reagan       win         +        -        +        +           yes

1992   Bush         loss        -        -        ~        ~           yes

1996   Clinton      win         ~        +        ~        +           yes


In 9 of the 11 cases, the observed figures confirm the hypothesis that
an incumbent's fate is decided by the health of the economy.
Roosevelt's win of 1940 tends to contradict it, since the economy was
in the doldrums after a decade of depression, illustrating that great
personal appeal or urgent geopolitical considerations can override the
economic question. Carter's 1980 loss is inconclusive: unemployment
was gradually fading and business was on an upswing, but GDP growth
was declining and inflation was sharp. Perhaps this shows the decisive
influence on the electorate of inflation, which hurts consumers
immediately and visibly.

In conclusion, a strong case can be made for the proposal that a
presidential incumbent wins in a strong economy and loses in a weak
one.

If you feel that my answer is incomplete or inaccurate in any way, please
post a clarification request so that I have a chance to meet your needs
before you assign a rating.

Regards,

leapinglizard


Search Queries:

u.s. elections
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excelent answer, lots of detail, thank you!!!