Peer reviewed papers
Inflated Expectations: How government partisanship shapes monetary policy bureaucrats’ inflation forecasts with Christopher Gandrud (Conditional acceptance at PSR&M)
Recent work argues that policy-makers at the United States Federal Reserve are not politically indifferent (Clark and Arel-Bundock, 2011). The Fed tends to choose looser monetary policies during Republican administrations, possibly in order to ensure the (re)election of ideologically preferred presidents. This model excludes an essential aspect of monetary policy decision-making: expectations about future inflation. We use the Fed’s Green Book forecasts to test whether presidents’ partisan identification shapes the estimates of future economic performance that influence FOMC policies. We find that Federal Reserve staff probably do not bias their forecasts to influence Fed governors around elections. However, they do systematically overestimate inflation during Democratic presidencies and underestimate inflation during Republican ones. This suggests that while not electorally motivated, Fed staff have a partisan bias when making inflation forecasts.
How “Point Blindness” Dilutes the Value of Stock Market Reports 2011. Political Communication 28(1), with Arthur Lupia, Yanna Krupnikov, Adam Seth Levine, William D. MacMillan, and Erin McGovern
The stock index “point” is a regular component of financial news reports. While much attention is paid to daily changes in stock index point totals, few people realize that the value of each stock index point also changes frequently. We call inattention to such variations “point blindness.” We describe point blindness’ psychological causes and economic consequences. Our empirical inquiries include a content analysis of New York Times articles that demonstrates how news reports fuel point blindness and an experiment that we conducted on over 2,000 Americans. The experiment shows how simple changes in news presentations can significantly affect public perceptions of stock market performance. The directions of these perceptual shifts correspond to a refined understanding of the changing value of stock index points. Hence, small changes to news reports can provide valuable information to audiences.
Please do not cite working papers without author’s permission.
The economic vote and democratic accountability literature has consistently emphasized the importance of clarity of policy responsibility in determining the amount of praise and blame voters are able to assign to governments. The argument is that when responsibility is shared between actors, voters are less able to assign blame for economic and political outcomes to the responsible actor. While a number of institutional factors have been considered by the literature, the institutions considered have largely been those that voters can directly punish through electoral mechanisms. However, there are numerous institutions that can affect political and economic outcomes that voters have no means of punishing for bad behavior. In this paper, I consider how economic voting is affected by the existence of independent central banks. How does the strength of an independent central bank affect the ability of voters to hold governments responsible for economic outcomes, particularly bad outcomes? Are voters sophisticated enough to recognize the central bank’s independent effect on economic outcomes? This paper develops the theoretical basis for why central banks ought to matter to voters and a research design to test the hypotheses born of this exercise.
Economic performance is thought to have two interrelated effects on electoral politics. Strong performance increases support for incumbent governments (e.g. Duch & Stevenson, 2008; Lewis-Beck, 1988; Powell & Whitten, 1993) and strong economic performance increases the likelihood of early elections being called (e.g Chowdhury, 1993; Ito, 1990; Kayser, 2006). The truth of the former is assumed to be the motivation for the latter. However, in multiparty contexts the electoral implications of economic performance may vary across governing parties. When no single party can dictate election timing, new coalitions of parties need to form in order to force early elections. This paper builds on Lupia and Strøm’s (1995) model of coalition termination to examine how changes in the relative benefits parties expect following an economic shock would shape their support for early elections, with implications for the distribution of votes in the election.
Double Jeopardy: How the Left Loses from Asymmetry of Partisan Accountability with Mark A. Kayser
That voters often punish incumbent parties for poor economic performance has been a tenet of electoral research for decades. Recent work, however, has strengthened the evidence for a partisan model of electoral behavior suggesting that voters turn against “luxury parties”–mostly parties of the left inclined toward higher social benefits and possibly accompanying taxes–in bad economic times. This paper simultaneously tests both electoral models and demonstrates one key implication: that when both behaviors obtain, left-of-center incumbent parties are more severely punished for economic contractions than their right-wing counterparts. Because the luxury goods model of voting only emerges once voters are sufficiently wealthy, this asymmetric partisan accountability mostly arises in developed democracies in later decades. Left parties in developed democracies pursue expansionary – and possibly inflationary – policies not only in the interests of their core constituents (Hibbs 1977) but also in their own interest.
Conceptions of State Responsibility in Central and Eastern Europe with Jennifer L. Miller
How do culture and history affect views on state responsibility? Have neo-liberal policies injected a sense of individualism or nostalgia for past protections by the state? We investigate the questions by using data from the World Value Survey and the European Social Survey to (a) measure conceptions of state responsibility and (b) examine variation across the region. We consider cultural, historical and institutional effects, as well as their interaction, in order to determine how culture constrains and shapes policy, and policy, in turn, shapes culture.
This paper contributes to the scholarship around the “clarity of responsibility hypothesis,” which links patterns of political institutions to the incidence of economic voting by citizens. We propose that these institutions affect voter behavior not through the mechanism of highly informed and sophisticated voters, as often claimed in the literature, but instead through the strategic actions of politicians campaigning for election. We argue that political institutions featuring high clarity of responsibility provide politicians with the clearest inventive to make the economy a central plank of their election campaigns. The elite behavior leads voters in turn to view the economy as more salient, to learn more about the economy, and therefore to treat the economy as a more important part of their vote decision. We find generally strong support for this argument with statistical tests using data from the Comparative Manifestos Project and the Eurobarometer series.