The Republican and Democratic parties each have a brand that helps to define what people believe they represent. One of the strong Republican brand attributes is the notion that their policies are good for business. I was curious to see if the economy’s performance under Republican administrations outperformed the economy’s performance under Democratic administrations and supported the claim.
Obviously there is no one metric that can be used to measure the health of the economy, but GDP is generally recognized to be the best overall barometer. In my analysis I also included the growth of imports, exports, private domestic investment as well as growth in non-military federal government spending. The numbers represent the percentage change from the previous year and include the years 1930-2007. The numbers are available from the government agency the Bureau of Economic Analysis (source at the bottom).
The blue and red background on the below chart indicate if a Republican (Red) or a Democrat (Blue) was in the White House. The Y-Axis indicates the percentage change from the previous year’s GDP.
GDP by nature is a trailing indicator, so I think it is legitimate to attribute some of the economy’s performance to the preceding party. In the below chart I attributed the first two years of the economy’s performance to the previous party’s administration. See results below.
A strong case can be made that the economy during WWII should be considered a statistical outlier. I’m not sure if necessarily agree, but was curious what the results would be if those years were removed.
In every scenario the economy under Democratic administrations outperforms the economy under Republican administrations by the above metrics. I don’t know if this is a strongly related causal relationship but statistically the economy has performed better under Democratic administrations.
As always, comments and suggestions are welcomed.