Partisan policies, macroeconomic performance and political support
In this paper we develop a voter model which builds on the partisan theory of macroeconomic policy. In the voter model, vote decisions are based on the economic performance of the incumbent and the type of economic problems a country faces. Like the conventional retrospective voter model, our model predicts that the incumbent benefits from favorable economic outcomes. In addition, our model leads to the prediction that Democratic presidents suffer more from inflation and benefit less from economic booms than Republican presidents. Estimates of popularity functions provide strong support for the hypotheses derived from our model.