The Economy and Presidential Election Cycles

Georgia Gwinnett College's Dr. David Felsen, a lecturer in political science, said that several factors can influence the outcome of a presidential election.

One of the key factors is the state of the economy.

On Sept. 18, the Federal Reserve cut the federal funds interest rate by 0.5%. Felsen said that this is a dramatic reversal from the rate hikes of the past couple of years, and that the Federal Reserve's economic outlook is uncertain.

"In all election cycles, the economic conditions and perceptions of the economy will sway voters," said Felsen.

For example, in the case of Ronald Reagan's 1980 victory, the inflation of the 1970s and the lingering economic recession hurt Jimmy Carter's re-election chances. In the 1992 presidential election, despite George H. W. Bush's popularity after the 1990-1991 Gulf War, a recession at the time cost him his re-election. In 2008, the global financial crisis impacted Barack Obama's victory over John McCain. In 2020, the pandemic and the subsequent, dramatic drop-off in economic activity impacted Joe Biden's win in the presidential election.

"Historically, the economy has influenced presidential election cycles dramatically," Felsen said. "The question this year is whether the economy will play as sizeable a role and which candidate will benefit most from current economic conditions."