Freakonomics: The President's Party and the Economy

The Freakonomics blog posted on how the economy fares under different Presidents.

The salient points:

Since 1949, Democratic presidents almost always presided over a decreasing or flattening of income inequality. During that same time period, Republican presidents have always presided over increasing income inequality.

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Additionally, real per-capita G.D.P. growth for all income strata is consistently higher under Democratic presidents. Individuals in the 95th percentile, however, do well under both Democratic and Republican presidents, but growth for the rich still tends to be higher when a Republican is in office.

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Democrats preside over lower levels of unemployment while their Republican counterparts have historically presided over lower levels of inflation. The most accepted explanation for this phenomenon is the existence of a short-run Philips Curve in which inflation and unemployment are inversely related.

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In the first two years of a Democratic president’s term, the economic growth accelerates. During the third and fourth years, however, the economic growth decreases. The opposite effect is seen with Republican presidents, who preside over decreasing overall growth during the first two years of their term only to have it followed by increased economic growth as re-election looms