Monday, September 29, 2008

Which Party Will Be Better for Economic Growth?

Alan Blinder, Princeton Economist, in a recent NY times article points out that economic growth has been higher under Democratic presidential administrations than Republican, but Casey Mulligan a University of Chicago Economist, shows that women’s wages grew faster relative to men’s wages during Republican presidencies than democratic.

So what does this mean? Greg Mankiw, Harvard Economist, points to the good old question does correlation =? causation. In other words it could have just been a coincidence that both things happened at the same time.

Mulligan has a good response to Mankiw’s question, basically if we give democrats credit for growth then we might want to also give Republicans credit for equality.

So who knows, which party will do better?

This makes me think of a similar problem with evaluating the 700 billion bailout plan. If the economy gets better, was it the bailout plan or did the economy just get better?

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