Presidential Vote Equation--July 27, 2007
The predictions of GROWTH, INFLATION, and GOODNEWS for the previous forecast from the US model (April 27, 2007) were 1.9 percent, 3.3 percent, and 1, respectively, and the predictions for the current forecast (July 27, 2007) are 2.2 percent, 3.5 percent, and 2, respectively. The data have been revised back to 2004:1, and in the revised data there are now 2 good news quarters (2005:3 and 2006:1) instead of just 1. This is the reason that GOODNEWS is now 2 instead of 1. No more good news quarters are forecast by the US model through the third quarter of 2008. The extra good news quarter has a positive effect on the vote prediction for the Republicans, and the predicted Republican vote share is now 48.0 percent rather than 46.8 percent before. The Republicans are thus predicted to lose the election by 2.0 percentage points given the new data and the current forecasts from the US model. The forecasts of inflation from the US model are probably more pessimistic than the current consensus view, and the forecasts of real growth are probably more optimistic. It is possible on this website to enter your own values for the three economic variables and produce a prediction for VOTE. (Compute your own prediction for 2008 using the 2004 update.) For example, if you think a recession is likely in 2008, you can enter some negative value for GROWTH.