|Presidential Vote Equation--November 5, 1999|
Given the latest revised NIPA data, there are 5 quarters from
1997:1 on in which the per capita real growth rate has exceeded 3.2 percent:
1997:1, 1997:2, 1998:1, 1998:4, and 1999:3. There are thus 5 good
news quarters so far that are relevant for the 2000 election.
Given the actual data through 1999:3 and the
November 5, 1999, US model forecast, the predicted values of
p15, n, and g3 are 1.8 percent, 5, and 2.2
percent, respectively. (No more good news quarters are forecast.)
Using these values and the estimated vote equation,
the predicted value for V is .471.
The election is thus predicted to be fairly close, with an edge for the
If the economy grows faster between now and the election than the US model is predicting, the predicted vote could swing in favor of the Democrats. (The US model has been underpredicting real growth for the last three years by about 2 percentage points---see The Forecasting Record of the US Model.) If, for example, g3 turns out to be 4.2 instead of 2.2 and if n turns out to be 7 instead of 5, then the predicted value of V is .503, which is a narrow Democratic victory. If, on the other hand, the stock market crashs and the economy goes into a recession, the Republicans are predicted to win easily.