The Economic Perspective: “Election Uncertainty and the Economy”

I’m Mary Walden, with economist MW, welcoming you to the economic perspective.  Today’s program looks at election uncertainty and the economy.  Mike, it’s generally recognized that the economy – particularly the investing component – doesn’t like uncertainty.  Some say this includes uncertainty about elections.  Please explain why uncertainty in the economy matters, and why election uncertainty may matter more.

  • Uncertainty matters because many economic decisions are based on long run expectations
  • Buying a stock, buying a home, or a business building a factory – all are based in part on future financial returns
  • If people are fuzzy about what those returns will, will reduce the desire to make long term spending plans
  • Some say this uncertainty extends to politics
  • Because elected officials can impact the economy with their decisions
  • Problem is, while serious studies can find impacts of general uncertainty on the economy, finding impacts from political uncertainty is harder
  • Nevertheless, a factor to consider
  • I’m MW

Mary:  And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.