Which party is better for economic growth?

A new study from economic experts at Princeton University concludes that economic growth in the United States is much better when Democrats control the White House, but provides no clear answer as to why that happens.

"We find that oil shocks, productivity shocks, and shocks to consumer expectations about the future each help explain the growth gap," said a paper titled, "Presidents and the Economy: A Forensic Investigation."

But authors Alan Blinder and Mark Watson are clear - they don't think Democrats have the corner on better policy choices, saying a lot of the reasons for the better economic growth record "look a lot more like good luck than good policy."

The study, reported in this morning's Wall Street Journal, found that economic growth in terms of real GDP averaged 3.33% in the last 64 years - under Democrats it was 4.35% and under Republicans it was 2.54%.

Blinder and Watsonn called that difference "astoundingly large."

"This paper asks why. We find that the answer is not found in technical time series matters (such as differential trends or mean reversion), nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the Democratic edge stems mainly from more benign oil shocks, superior TFP performance, and more optimistic consumer expectations about the near-term future. Many other potential explanations are examined, but they fail to explain the partisan growth gap."

You can read the entire paper on the Princeton website.

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