Question A:
A period of high inflation is substantially more electorally damaging to incumbent governments in advanced countries than a period of high unemployment.
Responses
Responses weighted by each expert's confidence
Question B:
Voters are more likely to punish incumbents for what they perceive as poor national economic performance than they are to reward incumbents for a good economy.
Responses
Responses weighted by each expert's confidence
Question A Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
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 Franklin Allen |
Imperial College London | Bio/Vote History | ||
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Apart from the pandemic, it's a while since most countries have had high unemployment. The pandemic was rather different because of the many measures governments took to offset its effects. We will see next time we have severe unemployment.
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 Pol Antras |
Harvard | Bio/Vote History | ||
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Far from my expertise. Both would be damaging, I am sure. We have recent evidence for the negative impact of inflation.
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 Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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clearly true this time. but, as an eternal truth, not obvious.
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 Richard William Blundell |
University College London | Bio/Vote History | ||
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 Maristella Botticini |
Bocconi | Bio/Vote History | ||
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 Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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 Elena Carletti |
Bocconi | Bio/Vote History | ||
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 Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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I would not generalize. In my view this clearly depends on circumstances
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 Paul De Grauwe |
LSE | Bio/Vote History | ||
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 Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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 Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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 Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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 Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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 Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
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 Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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 Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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 Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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 Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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no evidence this is the case
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 Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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 Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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Partly because high unemployment usually concentrated among those less likely to vote. Okun's misery index might not be too far off, though, as a quantitative measure of the trade-off in the median household's mind.
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 Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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 Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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Without "hard" evidence at hand, I can merely speculate. Here I do: It seems reasonable to me that observing soaring unemployment figures appears to be more tangible, more noticeable, than higher prices everywhere. As always, things depend on relative magnitudes...
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 Botond Kőszegi |
Central European University | Did Not Answer | Bio/Vote History | |
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 Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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 Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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It might as more people are affected by inflation than by unemployment. But the answer is unclear because, at least for the US, there is evidence that these two issues have different effects by party affiliation and hence the answer could depend on incumbent government.
-see background information here |
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 Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
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 Costas Meghir |
Yale | Bio/Vote History | ||
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The impacts of inflation are felt directly by almost everyone. The effects of unemployment, while leading to a pessimistic view of growth are directly felt by a relatively small group of people
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 Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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 Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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 Richard Portes |
London Business School | Bio/Vote History | ||
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See Stantcheva et al
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 Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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 Carol Propper |
Imperial College London | Bio/Vote History | ||
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 Imran Rasul |
University College London | Bio/Vote History | ||
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 Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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 Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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It depends on what is "high" on both. But, the last three years of US data teaches us little about this, since there was almost no increase in unemployment. If inflation had peaked at 6% but unemployment had risen above 6%, wouldn't Harris have lost by even more?
-see background information here |
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 Rafael Repullo |
CEMFI | Bio/Vote History | ||
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 Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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 Antoinette Schoar |
MIT | Bio/Vote History | ||
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 Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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 Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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 Silvana Tenreyro |
LSE | Bio/Vote History | ||
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 Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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 John Vickers |
Oxford | Bio/Vote History | ||
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 Hans-Joachim Voth |
University of Zurich | Did Not Answer | Bio/Vote History | |
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 Karl Whelan |
University College Dublin | Bio/Vote History | ||
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I think this certainly true now. Many people had forgotten what high inflation was like and found the experience upsetting. In previous times, when the public was more used to steady inflation, high unemployment rates were more politically salient.
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 Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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That's what we say after a period of inflation. We'd say the opposite of high unemployment.
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Question B Participant Responses
| Participant | University | Vote | Confidence | Bio/Vote History |
|---|---|---|---|---|
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Franklin Allen |
Imperial College London | Bio/Vote History | ||
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There are not that many democracies that have had good economic performance recently. The US yes but very few European countries have done well recently. In Asia South Korea has been doing well but Japan not very well. So again difficult to say. The US seems a special case.
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Pol Antras |
Harvard | Bio/Vote History | ||
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Again, far from my expertise, but it is likely that such an asymmetry exists.
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Olivier Blanchard |
Peterson Institute | Bio/Vote History | ||
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Sounds plausible. But I have not seen any estimate of this asymmetry.
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Richard William Blundell |
University College London | Bio/Vote History | ||
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Maristella Botticini |
Bocconi | Bio/Vote History | ||
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Agnès Bénassy-Quéré |
Paris School of Economics | Bio/Vote History | ||
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Elena Carletti |
Bocconi | Bio/Vote History | ||
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Jean-Pierre Danthine |
Paris School of Economics | Bio/Vote History | ||
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Again circumstances are important but it is easier for opponents to capitalize on bad news than for incumbents to promote good ones
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Paul De Grauwe |
LSE | Bio/Vote History | ||
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This is an application of Kahneman & Tversky's Prospect Theory
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Jan Eeckhout |
UPF Barcelona | Bio/Vote History | ||
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Xavier Freixas |
Barcelona GSE | Did Not Answer | Bio/Vote History | |
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Nicola Fuchs-Schündeln |
Goethe-Universität Frankfurt | Bio/Vote History | ||
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Jordi Galí |
Barcelona GSE | Bio/Vote History | ||
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Luis Garicano |
LSE | Did Not Answer | Bio/Vote History | |
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Yuriy Gorodnichenko |
Berkeley | Bio/Vote History | ||
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Rachel Griffith |
University of Manchester | Bio/Vote History | ||
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Veronica Guerrieri |
Chicago Booth | Bio/Vote History | ||
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Luigi Guiso |
Einaudi Institute for Economics and Finance | Bio/Vote History | ||
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Sergei Guriev |
Sciences Po | Bio/Vote History | ||
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Patrick Honohan |
Trinity College Dublin | Bio/Vote History | ||
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But voting is also about much more.
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Beata Javorcik |
University of Oxford | Bio/Vote History | ||
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Jan Pieter Krahnen |
Goethe University Frankfurt | Bio/Vote History | ||
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I tend to agree for reasons borrowing from prospect theory. Losses and gains of equal magnitude are translated into "utils" of different magnitude, the former being larger than the latter, in absolute terms.
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Botond Kőszegi |
Central European University | Did Not Answer | Bio/Vote History | |
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Eliana La Ferrara |
Harvard Kennedy | Did Not Answer | Bio/Vote History | |
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Christian Leuz |
Chicago Booth | Bio/Vote History | ||
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The Q of how much economic performance influences voting is subject to much research. Not sure there is a consensus, let alone evidence on asymmetric responses. The evidence also depends on country development and the strength of voter identification with the parties. See below.
-see background information here |
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Thierry Mayer |
Sciences-Po | Did Not Answer | Bio/Vote History | |
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Costas Meghir |
Yale | Bio/Vote History | ||
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Good performance is expected and considered the baseline. Bad performance is attributed to policies
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Marco Pagano |
Università di Napoli Federico II | Bio/Vote History | ||
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Lubos Pastor |
Chicago Booth | Bio/Vote History | ||
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"A strong economy favors the incumbent" is not the whole story. According to my JPE 2020 paper w Veronesi, "a strong economy favors Republicans, a weak economy favors Democrats." Our model predicted a Trump win in 2024, Biden win in 2020, Trump win in 2016, and more.
-see background information here |
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Richard Portes |
London Business School | Bio/Vote History | ||
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Canice Prendergast |
Chicago Booth | Bio/Vote History | ||
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Carol Propper |
Imperial College London | Bio/Vote History | ||
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Imran Rasul |
University College London | Bio/Vote History | ||
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Lucrezia Reichlin |
London Business School | Bio/Vote History | ||
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Ricardo Reis |
London School of Economics | Bio/Vote History | ||
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Loss aversion and reference dependence would suggest this, but I do not know of direct evidence for it in the election/macroeconomy context
-see background information here |
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Rafael Repullo |
CEMFI | Bio/Vote History | ||
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Hélène Rey |
London Business School | Did Not Answer | Bio/Vote History | |
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Antoinette Schoar |
MIT | Bio/Vote History | ||
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Kjetil Storesletten |
University of Minnesota | Bio/Vote History | ||
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Daniel Sturm |
London School of Economics | Bio/Vote History | ||
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Silvana Tenreyro |
LSE | Bio/Vote History | ||
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Rick Van der Ploeg |
Oxford | Bio/Vote History | ||
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John Vickers |
Oxford | Bio/Vote History | ||
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Hans-Joachim Voth |
University of Zurich | Did Not Answer | Bio/Vote History | |
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Karl Whelan |
University College Dublin | Bio/Vote History | ||
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I think this depends on the circumstances. Currently, there is a strong desire to blame incumbents in their country for the high inflation that occurred despite it being a global phenomenon. But incumbents have often won in the past when the economy was doing well.
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Charles Wyplosz |
The Graduate Institute Geneva | Bio/Vote History | ||
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It makes sense, superficially, for voters to expect policymakers to deliver good conditions. Except that the shock might be exogenous.
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