Growth Expectations Higher Following Biden’s Election

International experts expect the election of Joe Biden to boost economic growth in their countries. They expect the Democratic candidate’s win will add 1.16 percentage points on average to growth in 2021, according to an ifo Institute survey of 843 experts from 107 countries. “After the ongoing coronavirus crisis and its drastic effects, respondents say Biden’s presidency could be a ray of hope for global economic development in the coming year,” write Niklas Potrafke, Director of the ifo Center for Public Finance and Political Economy, and his three co-authors in an article for the journal ifo Schnelldienst. However, respondents in the US did not expect any change for their own country, making the overall effect plus 0.98 percentage points.

At the same time, Potrafke points out that in the period from 1949 to 2012, economic growth under Democratic presidents in the US was 1.79 percentage points higher than under Republican presidents. “Assuming this pattern continues, then a look at the past suggests higher growth rates under Democrat Joe Biden than under a second term of Republican Donald Trump,” the study says.

The first half of the responses were obtained in the five days leading up to the November 3 election date, the other half thereafter in the period November 8–13.