GDP growth under Dem/Rep administrations.

[DanTex]

This is a follow up to another OP, about a Washington Post article comparing GDP growth under Democratic and Republic presidencies since WW2.
http://www.democraticunderground.com/10024124587

GDP growth is significantly higher under Dems than Reps (4.35 vs 2.54 according to the article). One excuse for the GOP might be that GOP presidents inherit a worse economy. So I decided to check out the breakdown into quarters, using data from the BEA.
http://www.bea.gov/national/

The results are interesting. It turns out the GDP growth during the first quarter of a Republican administration (i.e. Jan through March after the election) is actually higher than for Dems, but then growth picks up under Dem administrations but slows down under Rep administrations. Here is a chart of average cumulative GDP growth through a 4-year term (Dem is blue, Rep is red).


Overall, during a 4-year term, GDP grows about 6% more during a Dem administration than a Rep one, and the entire 6% difference is due to the first two years in office. Here is a chart of the cumulative growth differential (Dem-Rep).


I didn't do any significance testing or anything like that, just some quick plots. I used seasonally adjusted quarterly growth rates from BEA, starting in 1949 (Truman) through the most recent quarter (2013Q3). The Washington Post article actually found a larger differential than the data I looked at, which probably has to do with the way the data was adjusted, or start/end points, etc. Unless I made a mistake, which is also possible.

[TampaAnimusVortex]

1. Interesting, but it would be more interesting to see it related to parties...

Who controls the presidency is one thing, but who controls the bulk of the legislation is another.

As we see, a minority of people in the house can bring just about all legislation to a standstill, making the president, senate, and the house ineffective during that term as far as the economy goes.

I personally think the federal reserve has more immediate impact on the economy then who the president or congress is, barring some huge legislation - which requires pretty much dominating the political theatre.

[DanTex]

2. This is true. And there are a lot of other controls that should be there also.

I also agree that the fed has a more immediate impact. And like I said, I didn't do any significance testing.

Problem is, there's really not a lot of data, so there's not much room for too many variables without overfitting.