‘It’s The Private Sector, Stupid’: Trump May Have A Ricardian Equivalence Problem

Conventional wisdom has it that incumbents will pursue expansionary fiscal policy in the lead up to an election. If it really is "the economy, stupid", then it would be political suicide not to pull out all the stops ahead of the vote. Indeed, a look back at nearly four decades of history shows that in two elections when the incumbent was defeated, the fiscal impulse was neutral in the fiscal year immediately before the election and contractionary (i.e., the change in the structural deficit wa