Paper
Real Effects of Markets on Politics: Evidence from U.S. Presidential Elections
Link al draft
https://www.dropbox.com/s/d2pvmhw8hr5cj3l/Elections_StockMarket.pdf?dl=0
Autores
Alan Crane (Rice); Andrew Koch (Pittsburgh); Leming Lin (Pittsburgh)
Abstract
Despite the economic importance of the U.S. stock market, there is strikingly little evidence of its impact on elections. Using county-level variation in stock market participation, we document a causal impact of market returns on election outcomes. High-participation counties are more likely to vote for the incumbent party when the market has performed well relative to low-participation counties. The effect is weaker in Republican-leaning counties and more politically active counties, and comes mostly through the intensive margin rather than affecting turnout. Our findings provide evidence of a novel channel through which stock market fluctuations could be transmitted into the real economy.
