U.S. Presidential Approval and the Macroeconomy : 1960-2022

U.S. presidential approval is a topic that has long attracted the interest of political pundits, journalists, candidates and voters. Academic studies of presidential approval have been dominated by political scientists while economists have focused on the president’s political party and economic performance. This study will add to this literature with a focus on presidential approval and measures of the U.S. macroeconomy. This research will update, expand and reinvestigate this relationship using new data, additional variables and the IVX predictive regression model of Kostakis, et al. (2015), specifically developed for time series data with mixed orders of integration such as we have here. Using perhaps the most comprehensive set of macroeconomic variables to date in a single study, we found that macroeconomic variables make a difference in using regression models to indicate predictive significance. Our results suggest that macroeconomic variables and policies have an impact on presidential approval. Specifically, after controlling for other macroeconomic variables, time period and political party, more immediate “pocketbook issues” like gas prices and inflation expectations are important issues to voters. Simply put, our regression results suggest rising prices lower presidential approval