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Stable genius: Estimating the ‘Trump effect’ on the US economy

VOX – CEPR Policy Portal, 18 July 2018, by Benjamin Born, Gernot Müller, Moritz Schularick, Petr Sedláček

Growth and employment in the US have been robust over the past 18 months, and President Trump frequently takes personal credit for these trends. This column explores how the US economy would have evolved without Trump. An analysis shows no difference between the post-election performance of the US economy under Trump and a synthetic ‘doppelganger’ US economy without Trump, suggesting that there has been no ‘Trump effect’.

On many metrics, the US economy is doing well. To pick one indicator, in May 2018 the unemployment rate reached 3.8%, the lowest value in two decades. President Trump, in office for one and a half years, does not hesitate to claim credit for these developments. He asserts in characteristic hyperbole:

We’ve got the greatest economy, maybe, ever — maybe in history. We have the greatest economy we’ve ever had…. If we didn’t win, this economy would be a wreck.” (Trump 2018)

A recent White House release argues that because of the ‘pro-growth agenda’ of President Trump “the economy has created nearly 3 million jobs” (The White House 2018).  But to what extent does President Trump really deserve credit for the booming economy? “[…]”


Read the full article here.