Does the UK economy grow faster under a Conservative or Labour government?

Authors

  • Amr Saber Algarhi Sheffield Hallam University, United Kingdom
  • Alexander Tziamalis Sheffield Hallam University, United Kingdom

DOI:

https://doi.org/10.17811/ebl.10.2.2021.95-101

Abstract

We use quarterly data from 1955 to 2019 to examine the performance of Conservative and Labour administrations in terms of real GDP growth in the United Kingdom. To account for fiscal lags in the legislation and implementation of new policies by each administration, we explore up to lag 8 in addition to an overlapping technique. Our main finding is that the UK economy has grown with a similar pace under both parties, however Labour governments seem to do better in tackling recessions and achieve a more consistent performance. Labour’s advantage becomes more pronounced if we discount the effect of a large external shock, the 2008 Financial Crisis.

Author Biographies

Amr Saber Algarhi, Sheffield Hallam University, United Kingdom

Senior Lecturer in Economics

 

Alexander Tziamalis, Sheffield Hallam University, United Kingdom

Senior Lecturer in Economics

 

References

Blinder, A.S. and Watson, M.W. (2016). Presidents and the US Economy: An Econometric Exploration, American Economic Review, 106(4),1015-1045. doi: 10.1257/aer.20140913

Campbell, J.E. (2012). The President’s Economy: Parity in Presidential Party Performance, Presidential Studies Quarterly, 42(4), 811-818.

Comiskey, M. and Marsh L. (2012). Presidents, Parties and the Business Cycle, Presidential Studies Quarterly, 42(1), 40-59.

Hibbs, D.A. (1977). Political parties and Macroeconomic Policy, American Political Science Review, 70(4), 1467-1487.

Kane, Tim (2017). Presidents and the US Economy from 1949 to 2016, Hoover Institution Economics Working Papers, 17101.

Prescott-Smith, Sarah (2019, November 7). Which issues will decide the general election? Retrieved from http://yougov.co.uk

Smith, Matthew (2019, November 12). Labour economic policies are popular, so why aren’t Labour? Retrieved from http://yougov.co.uk

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Published

2021-05-31

How to Cite

Algarhi, A. S., & Tziamalis, A. (2021). Does the UK economy grow faster under a Conservative or Labour government?. Economics and Business Letters, 10(2), 95-101. https://doi.org/10.17811/ebl.10.2.2021.95-101

Issue

Section

Policy Watch