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Economic leadership and growth

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  • Brown, Craig O.

Abstract

Economies governed by former economics students grow faster than economies governed by leaders with other education backgrounds; a result which is most evident for presidents. Faster growth (average growth) occurs during an economic leader's first year (entire tenure), primarily through investment. When focusing on close elections which “quasi-randomize” economic leadership, I find a large effect that is robust controlling for a leader's advanced education. Investors seem to hasten their activity in anticipation of their economic leader's eventual reduction of the top personal income-tax rate. Overall, the findings suggest that economic leaders improve short-term growth through the anticipation of policy changes.

Suggested Citation

  • Brown, Craig O., 2020. "Economic leadership and growth," Journal of Monetary Economics, Elsevier, vol. 116(C), pages 298-333.
    • Handle: RePEc:eee:moneco:v:116:y:2020:i:c:p:298-333
    DOI: 10.1016/j.jmoneco.2019.11.004
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    Cited by:

    1. Oscar Calvo-Gonz'alez & Axel Eizmendi & Germ'an Reyes, 2022. "The Shifting Attention of Political Leaders: Evidence from Two Centuries of Presidential Speeches," Papers 2209.00540, arXiv.org, revised Jun 2023.
    2. Philipp Hauber & Stormy-Annika Mildner & Galina Kolev & Jürgen Matthes & Sonja Peterson & Reimund Schwarze & Christiane Lemke & Martin, Thunert & Laura von Daniels & Josef Braml & Johannes Varwick & D, 2021. "Die USA unter Joe Biden: Kehrtwende oder "America first light"?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 74(01), pages 03-37, January.
    3. Dorine Boumans & Klaus Gründler & Niklas Potrafke & Fabian Ruthardt, 2021. "The Global Economic Impact of Politicians: Evidence from an International Survey RCT," EconPol Working Paper 56, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    4. Boumans, Dorine & Gründler, Klaus & Potrafke, Niklas & Ruthardt, Fabian, 2024. "Political leaders and macroeconomic expectations: Evidence from a global survey experiment," Journal of Public Economics, Elsevier, vol. 235(C).
    5. Peveri, Julieta, 2022. "The wise, the politician, and the strongman: Types of national leaders and quality of governance," Journal of Comparative Economics, Elsevier, vol. 50(4), pages 849-895.

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    More about this item

    Keywords

    Government leadership; Economics education; Economic growth; Policy anticipation; Government finance; Tax cuts;
    All these keywords.

    JEL classification:

    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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