{"id":1447701,"date":"2024-01-04T18:20:00","date_gmt":"2024-01-04T23:20:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1447701"},"modified":"2024-01-04T18:20:00","modified_gmt":"2024-01-04T23:20:00","slug":"how-to-make-an-economy-better-in-election-year","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/how-to-make-an-economy-better-in-election-year\/1447701\/","title":{"rendered":"How To Make An Economy Better In Election Year"},"content":{"rendered":"

How To Make An Economy Better In Election Year<\/span><\/p>\n

\n

Authored by Law Ka-chung via The Epoch Times,<\/em><\/a><\/p>\n

In 2024, presidential and congressional elections will take place in many countries. <\/strong><\/p>\n

There has been speculation for a long time that existing ruling regimes try their best to make the economy prosperous and market bullish in the run-up to an election. The underlying belief of this is that government policies, whether fiscal or monetary, are effective and efficient. The latter is crucial because this requires a policy launched in the election year to have an imminent impact on the economy or market.<\/p>\n

If the pleasing actions by the existing ruling regime are more oral than practical, then soon after, people would find no improvements in the situation and see through such manipulation tricks.<\/strong><\/p>\n

Accordingly, whether actions are deeds more than words or words more than deeds does not really matter, because what matters is policies done previously if policies are to be effective.<\/p>\n

What policies have been in place so far? <\/strong><\/p>\n

Clearly, there has been a series of monetary tightening over the past two years, which are supposed to generate the expected cooling impact in 2024.<\/p>\n

Because of such a long lag in policy effects (if any), the election year might not exhibit prosperity as expected. <\/strong><\/p>\n

The accompanying chart counts the number of years having various real GDP (year-over-year) growth ranges by years (n) before an election. Here, n = 0 means election year, n = 1 means one year before election, and so on. The counts are presented as a histogram against real GDP growth. A distribution leaning towards the right means better real GDP growth. <\/strong>The data used are the official ones dated earliest from 1930, giving an almost a century\u2019s record.<\/p>\n

<\/a><\/p>\n

U.S. Real GDP Growth n Year Before Elections (1930\u20132022). (Courtesy of Law Ka-chung)<\/em><\/p>\n

The chart shows the election year (blue line) having slightly better economic performance (leaning somewhat more to the right than other colors).<\/strong><\/p>\n

However, the central tendencies of these distributions might not differ statistically, although the dispersions might look a bit different.<\/p>\n

Since there are only slightly more than twenty counts for each year, the small sample (< 30) properties do not allow too much statistical inference from these results.<\/p>\n

What can be concluded is that the election year effect looks more like a slogan than anything statistical.<\/strong><\/p>\n

On a specific case level, there are many election years with bad economic performance, namely, 2020 with the COVID-19 lockdown, 2008 with a financial tsunami, and 2000 with the tech bubble burst.<\/p>\n

As explained above, such belief relies deeply on the policy impact. <\/strong><\/p>\n

<\/a><\/p>\n

For 2024, the market expects the Federal Reserve to begin rate cuts as early as March. <\/strong><\/p>\n

Nevertheless, experience suggests monetary policy typically has a time lag of 1 to 2 years.<\/p>\n

This means if the U.S. economy turns bad within this year, there is not enough time for any policy changes to put off the fire.<\/strong><\/p>\n

[ZH: The timing of Powell’s sudden pivot\u00a0 – which sparked stocks to soar and soft-survey data to improve as rate-cut expectations spiked – happens to have coincided with the rapid decline in President Biden’s approval rating<\/a>…]<\/em><\/p>\n

<\/a><\/p>\n

This might explain why n = 3 (red line) is also a good year because if a series of easings is made in an election year (n = 0), then the effect will be seen in the year (n = 3).<\/p>\n

Will such history repeat this time? We must wait and see.<\/strong><\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nThu, 01\/04\/2024 – 13:20<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/political\/how-make-economy-better-election-year<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

How To Make An Economy Better In Election Year Authored by Law Ka-chung via The Epoch Times, In 2024, presidential and congressional elections will take…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1447701","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1447701","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1447701"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1447701\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1447701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1447701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1447701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}