Category: Political Science
Partisan Bias in Professional Macroeconomic Forecasts
Here is a recent paper by Benjamin S. Kay, Aeimit Lakdawala, and Jane Ryngaert:
Using a novel dataset linking professional forecasters in the Wall Street Journal Economic Forecasting Survey to their political affiliations, we document a partisan bias in GDP growth forecasts. Republican-affiliated forecasters project 0.3-0.4 percentage points higher growth when Republicans hold the presidency, relative to Democratic-affiliated forecasters. Forecast accuracy shows a similar partisan pattern: Republican-affiliated forecasters are less accurate under Republican presidents, indicating that partisan optimism impairs predictive performance. This bias appears uniquely in GDP forecasts and does not extend to inflation, unemployment, or interest rates. We explain these findings with a model where forecasters combine noisy signals with politically-influenced priors: because GDP data are relatively more uncertain, priors carry more weight, letting ideology shape growth projections while leaving easier-to-forecast variables unaffected. Noisy information therefore amplifies, rather than substitutes for, heterogeneous political priors, implying that expectation models should account for both information rigidities and belief heterogeneity. Finally, we show that Republican forecasters become more optimistic when tax cuts are salient in public discourse, suggesting that partisan differences reflect divergent beliefs about the economic effects of fiscal policy.
Here is the SSRN link.
My excellent Conversation with Helen Castor
Here is the audio, video, and transcript. Here is part of the episode summary:
Tyler and Helen explore what English government could and couldn’t do in the 14th century, why landed nobles obeyed the king, why parliament chose to fund wars with France, whether England could have won the Hundred Years’ War, the constitutional precedents set by Henry IV’s deposition of Richard II, how Shakespeare’s Richard II scandalized Elizabethan audiences, Richard’s superb artistic taste versus Henry’s lack, why Chaucer suddenly becomes possible in this period, whether Richard II’s fatal trip to Ireland was like Captain Kirk beaming down to a hostile planet, how historians continue to discover new evidence about the period, how Shakespeare’s Henriad influences our historical understanding, Castor’s most successful work habits, what she finds fascinating about Asimov’s I, Robot, the subject of her next book, and more.
Here is an excerpt from the opening sequence:
COWEN: Richard II and Henry IV — they’re born in the same year, namely 1367. Just to frame it for our listeners, could you give us a sense — back then, what was it that the English government could do and what could it not do? What is the government like then?
CASTOR: I think people might be surprised at quite how much government could do in England at this point in history because England, at this point, was the most centralized state in Europe, and that has two reasons. One is the Conquest of 1066 where the Normans have come in and taken the whole place over. Then, the other key formative period is the late 12th century when Henry II is ruling an empire that stretches from the Scottish border all the way down to southwestern France.
He has to have a system of government and of law that can function when he’s not there. By the late 14th century, when Richard and Henry — my two kings in this book — appear on the scene, the king has two key functions which appear on the two sides of his seal. On one side, he sits in state wearing a crown, carrying an orb and scepter as a lawgiver and a judge. That is a key function of what he does for his people. He imposes law. He gives justice. He maintains order.
On the other side of the seal, he’s wearing armor on a warhorse with a sword unsheathed in his hand. That’s his function as a defender of the realm in an intensely practical way. He has to be a soldier, a warrior to repel attacks or, indeed, to launch attacks if that’s the best form of defense. To do that, he needs money.
For that, the institution of parliament has developed, which offers consent to taxation that he can demonstrate is in the national interest. It has also come to be a law-making forum. Wherever he needs to make new laws, he can make statute law in Parliament that therefore, in its very nature, has the consent of the representatives of the realm.
COWEN: What is it, back then, that government cannot do?
CASTOR: What a government doesn’t have in the medieval period is, it doesn’t have a monopoly of force. In other words, it doesn’t have a police force. It doesn’t have a professional police force, and it doesn’t have a standing army, or at least by the late Middle Ages, England does have a permanent garrison in Calais, which is its outpost on the northern coast of France, but that’s not a garrison that can be recalled to England with any ease.
So, enforcement is the government’s key problem. To enforce the king’s edicts, it therefore relies on a hierarchy of private power on the landed, the great landowners of the kingdom, who are wealthy because of their possession of land, but crucially, also have control over people, the men who live and work on their land. If you need to get an enforcement posse — this is medieval English language that we use when we talk of sheriffs and posses — the county posse, the power of the county.
If you need to get men out quickly, you need to tap into those local power structures. You don’t have modern communications. You don’t have modern transport. The whole hierarchy of the king’s theoretical authority has to tap into and work through the private hierarchy of landed power.
COWEN: Why do those landed nobles obey the king? They’re afraid of the future raising of an army? Or they’re handed out some other benefit? What keeps the incentives all working together to the extent they stay working together?
CASTOR: They have a very important pragmatic interest in obeying the king because the king is the keystone of the hierarchy within which they are powerful and wealthy. Of course, they want more power and more wealth for themselves and for their dynasty, but importantly, they don’t want to risk everything to acquire more if it means serious danger that they might lose what they already have.
They have every interest in maintaining the hierarchy as it already is, within which they can then . . . It’s like having a referee…
A very good episode, definitely recommended. I enjoyed all of Helen’s books, most notably the recent
Sentences to ponder
In a much more narrow case, a big study of the views of AI and machine learning researchers revealed high levels of trust in international organizations and low levels of trust in national militaries.
That is from Matt Yglesias.
Naveen Nvn’s ideological migration (from my email)
I started following American politics only in 2010/2011, which is two years after his [Buckley’s] death, and I was in India at that time.
Plus, I was very liberal at that time.
Around 2018-19ish, I was pushed into a centrist stance because I was appalled by wokeness, especially on campuses. I was in graduate school in the US at that time. Although I didn’t experience wokeness advocacy in the classroom except two or three incidents, I saw signs of wokeness on campus a lot. But even then, I was quite libertarian on how universities ought to handle campus politics.
I picked up God and Man at Yale around this time because wokeness was my primary concern.
I’ve always known that conservatives love that book. I assumed it would be a defense of free inquiry and against universities having a preferred ideology.
However, to my surprise, in the book, he argued explicitly that Yale was neglecting its true mission and it should uphold its “foundational values,” as he put it. I assumed he would be promoting a libertarian outlook on campus politics, but he was arguing the opposite.
He said Yale and other elite universities should incorporate free markets and traditional perspectives directly into the curriculum because they are betraying a contract that the current alumni and the administration have with the founders of the universities. It was a pretty shocking advocacy of conservatism being imposed on the students, and I didn’t like that at all.
But later on, around 2020-ish, I became a conservative (thanks to you; more on that in the link below). But even as late as early 2023, I still held a libertarian view on academic freedom and campus politics.
(You may be interested in a comment I left on your ‘Why Young People Are Socialist’ post yesterday, in which I shared how I was once a liberal, then turned centrist, and how I finally turned conservative. You are a major influence.)
But after Oct 7, all of that changed quite fast. Watching the pro-Hamas protests on campuses that started the very next day after October 7, before even one IDF soldier set foot on Gaza, I immediately thought about God and Man at Yale. I wanted to go back and re-read God and Man at Yale.
Everything I’ve witnessed after Oct 7 — Harvard defending Claudine Gay, Harvard explicitly stating they’re an “international institution” and not an American institution, DEI, anti-White, anti-Asian discrimination, etc. has convinced me that WFB Jr. was right.
Elite universities ought to be promoting free markets and pro-American, pro-Western views. I don’t believe we should have a completely libertarian approach to academic freedom. That’s untenable in this day and age. (Again, demographics is destiny, even within organizations.)
I’ve become significantly less libertarian on a wide range of issues compared to where I was just two years ago, and not just on academic freedom/university direction.
So yes, WFB Jr. has influenced me on this idea.
Asymmetric economic power?
America’s trading partners have largely failed to retaliate against Donald Trump’s sweeping tariffs, allowing a president taunted for “always chickening out” to raise nearly $50bn in extra customs revenues at little cost.
Four months since Trump fired the opening salvo of his trade war, only China and Canada have dared to hit back at Washington imposing a minimum 10 per cent global tariff, 50 per cent levies on steel and aluminium, and 25 per cent on autos.
At the same time US revenues from customs duties hit a record high of $64bn in the second quarter — $47bn more than over the same period last year, according to data published by the US Treasury on Friday.
China’s retaliatory tariffs on American imports, the most sustained and significant of any country, have not had the same effect, with overall income from custom duties only 1.9 per cent higher in May 2025 than the year before.
Here is more from the FT. To be clear, I do not think this is good. Nonetheless it amazes me how many economists a) reject the “Leviathan” approach to analyzing public choice and U.S. government, b) think “normative nationalism” is fine, c) have expressed partial “trade skepticism” for some while, and d) think our government should raise a lot more revenue, including through consumption taxes…and yet they find this to be about the worst policy they ever have seen.
Some also will tell you that higher inflation is not such a terrible thing, though whether they extend this view to inflation from real shocks is disputable.
With some debatable number of national security exceptions, zero tariffs is the way to go. But you can only get there through broadly libertarian frameworks, not through conventional “mid-establishment” policy analyses.
Finland fact of the day
Nearly half of Finns now identify with the political right, according to a new survey by the Finnish Business and Policy Forum (EVA), marking a record high in the organisation’s annual values and attitudes research.
The 2025 survey found that 49 percent of respondents place themselves on the right of the political spectrum. The proportion identifying with the left stands at 31 percent, while only 19 percent consider themselves centrist. The centre has declined steadily with each round of the survey.
Here is the full story, via Rasheed.
Bari Weiss, Kyla Scanlon, and I on why young people love socialism
Here is the podcast.
Greater Bias Toward Transgender People Compared to Gay Men and Lesbian Women Is WEIRD
The greater acceptance of gay, compared with transgender, people in Western countries may be a result of a specific trajectory—where queer rights was centered by and around White, middle class, gender-conforming gay men—and may not generalize to other places. Two surveys of respondents in 23 countries (Ns∼ = 500 or 1,000 per country) showed that bias toward gay and transgender people is lower in Western (vs. non-Western) countries, but that the relative bias changes as a function of region: there is greater acceptance of gay (vs. transgender) people in most Western countries, whereas the reverse is true in most non-Western countries. Analyses of legal frameworks (N = 193) show that recognition of same-gender unions is prevalent in Western countries but virtually nonexistent elsewhere, whereas recognition of gender marker changes is prevalent throughout the world. Overall, in the most intolerant places, transgender people are relatively more accepted than gay people.
Here is the recent article by Jaimi L. Napier. Via a loyal MR reader.
The revival of socialism is an example of negative emotional contagion
That is the theme of my latest Free Press column. Rather than present the argument again, let me move directly to the trolling part of the piece:
Even the Soviet Union had some positive and forward-looking elements to its socialist doctrine. The stated goal was to overtake the United States, not “degrowth.” You were supposed to have kids to support the glory of communism, not give up on the idea because the world was too dreadful. Socialist labor was supposed to be fun and rewarding, not something to whine about. Furthermore, there were top performers in every category, including in the schools. Moscow State University was a self-consciously elite institution that intended to remain as such. However skewed the standards may have been, there was an intense desire to measure the best and (sometimes) reward them with foreign travel, as in chess and pianism. In an often distorted and unfair way, some parts of the Soviet system respected the notion of progress. For all the horrors of Soviet communism, at least along a few dimensions it had better ideals than some of those from today, including the undesirability of having children, and a dislike of economic growth.
There is much more at the link.
Economic literacy and public policy views
From a recent paper by Jared Barton and Cortney Rodet:
The authors measure economic literacy among a representative sample of U.S. residents, explore demographic correlates with the measure, and examine how respondents’ policy views correlate with it. They then analyze policy view differences among Republicans and Democrats and among economists and non-economists. They find significant differences in economic literacy by sex, race/ethnicity, and education, but little evidence that respondents’ policy views relate to their level of economic literacy. Examining heterogeneity by political party, they find that estimated fully economically literate policy views (i.e., predicted views as if respondents scored perfectly on the authors’ economic literacy assessment) for Democrats and Republicans are farther apart than respondents’ original views. Greater economic literacy among general survey respondents also does not result in thinking like an economist on policy.
Sad!
What should I ask Anne Appelbaum?
Yes, I will be doing a Conversation with her. From Wikipedia:
Anne Elizabeth Applebaum…is an American journalist and historian. She has written about the history of Communism and the development of civil society in Central and Eastern Europe. She became a Polish citizen in 2013.
Applebaum has worked at The Economist and The Spectator magazines, and she was a member of the editorial board of The Washington Post (2002–2006). She won the Pulitzer Prize for General Nonfiction in 2004 for Gulag: A History. She is a staff writer for The Atlantic magazine, as well as a senior fellow of the Agora Institute and the School of Advanced International Studies at Johns Hopkins University .
But she has done more yet, including work on a Polish cuisine cookbook. So what should I ask her?
*Breakneck: China’s Quest to Engineer the Future*
The objectivity of Community Notes?
We use crowd-sourced assessments from X’s Community Notes program to examine whether there are partisan differences in the sharing of misleading information. Unlike previous studies, misleadingness here is determined by agreement across a diverse community of platform users, rather than by fact-checkers. We find that 2.3 times more posts by Republicans are flagged as misleading compared to posts by Democrats. These results are not base rate artifacts, as we find no meaningful overrepresentation of Republicans among X users. Our findings provide strong evidence of a partisan asymmetry in misinformation sharing which cannot be attributed to political bias on the part of raters, and indicate that Republicans will be sanctioned more than Democrats even if platforms transition from professional fact-checking to Community Notes.
Here is the full paper. I guess it agrees with Richard Hanania…
Who in California opposes the abundance agenda?
Labor unions are one of the culprits, environmental groups are another:
Hours of explosive state budget hearings on Wednesday revealed deepening rifts within the Legislature’s Democratic supermajority over how to ease California’s prohibitively high cost of living. Labor advocates determined to sink one of Newsom’s proposals over wage standards for construction workers filled a hearing room at the state Capitol mocking, yelling, and storming out at points while lawmakers went over the details of Newsom’s plan to address the state’s affordability crisis and sew up a $12 billion budget deficit.
Lawmakers for months have been bracing for a fight with Newsom over his proposed cuts to safety net programs in the state budget. Instead, Democrats are throwing up heavy resistance to his last-minute stand on housing development — a proposal that has drawn outrage from labor and environmental groups in heavily-Democratic California.
Here is the full story, via Josh Barro. To be clear, I am for the abundance agenda.
My excellent Conversation with Austan Goolsbee
Here is the audio, video, and transcript. Here is part of the episode summary:
A longtime professor at the University of Chicago’s Booth School and former chair of the Council of Economic Advisers under President Obama, Goolsbee now brings that intellectual discipline—and a healthy dose of humor—to his role as president of the Federal Reserve Bank of Chicago.
Tyler and Austan explore what theoretical frameworks Goolsbee uses for understanding inflation, why he’s skeptical of monetary policy rules, whether post-pandemic inflation was mostly from the demand or supply side, the proliferation of stablecoins and shadow banking, housing prices and construction productivity, how microeconomic principles apply to managing a regional Fed bank, whether the structure of the Federal Reserve system should change, AI’s role in banking supervision and economic forecasting, stablecoins and CBDCs, AI’s productivity potential over the coming decades, his secret to beating Ted Cruz in college debates, and more.
Excerpt:
COWEN: Okay, if the instability comes from the velocity side, that means that we should favor a monetary-growth rule to target the growth path of a nominal GDP, M times V, right?
GOOLSBEE: [laughs] Yes, and now you’re going to get me in trouble, Tyler. Here’s the thing I’ve known —
COWEN: You can just say yes. You’re not in trouble with me.
GOOLSBEE: I’m not going to say yes because, remember, I don’t like making policy off accounting identities. There’s no economic content in accounting identity. If you are trying to design a rule, that rule may work if the shocks are the same as what they always were in previous business cycles. I called it the golden path.
When we came into 2023, you’ll recall the Bloomberg economists said there was a 100 percent chance of recession in 2023. They announced it at the end of 2022. That’s when I came into the Fed system, the beginning of ’23.
That argument was rooted in the past. There had never been a drop of inflation of a significant degree without a very serious recession. Yet in 2023, there was. Inflation fell almost as much as it ever fell in one year without a recession. If you over-index too much on a rule that implicitly is premised on that everything is driven by demand shocks, I just think you want to be careful over-committing.
COWEN: I’m a little confused at the theoretical level. On one hand, you’re saying M times V is an identity, but on the other hand, it drives inflation dynamics.
GOOLSBEE: It’s why I started back from the . . . I bring a micro sentiment to the thinking about causality and supply and demand. I sense that you want to bring us to a, let’s agree on a monetary policy rule, and I’m inherently a little uncomfortable. I want to see what the rules say, but I fundamentally don’t want us to pre-commit to any given rule in a way that’s not robust to shocks.
COWEN: Now, you mentioned the post-pandemic inflation and the role of the supply side. When I look at that inflation, I see prices really haven’t come back down. They’ve stayed up, and I see service prices are also quite high and went up a lot, so I tend to think it was mostly demand side. Now, why is that wrong?
GOOLSBEE: There’re two parts to that. I won’t say why it’s wrong, but here are my questions. If you’re firmly a ‘this-all-came-from-demand’ guy, (A) you’ve got to answer, why did inflation begin soaring in the US when the unemployment rate is over 6 percent? Or we could turn it into potential output terms if you want, but output is below our estimate of potential. Unemployment is way higher than what we think of as the natural rate, and inflation is soaring. That already should make you a little questioning.
COWEN: I can cite M2. You may not like it. M2 went up 40 percent over a few-year period, right?
GOOLSBEE: Two, the fact that the inflation is taking place simultaneously in a bunch of countries of similar magnitudes that did not have the kind of aggregate demand, fiscal or monetary stimulus that we had in the US is also a little bit of a puzzle.
Then the third is, if you don’t think it was supply, then you need to have an explanation for why, when the stimulus rolls off, everything about the stimulus is delta from last year. We pass a big fiscal stimulus, we have substantial monetary stimulus that rolls off, the inflation doesn’t come down. Then in ’23, when the supply chain begins to heal, you see inflation come down. Those three things suggest there’s a little bit of a puzzle if you think it was all demand.
COWEN: No, I don’t think it was all demand, but you mentioned other countries. Switzerland and Japan — they import a lot. They were more restrained on the demand side. They had much lower rates of price inflation. That seems to me strong evidence for being more demand than supply.
GOOLSBEE: Wait a minute.
COWEN: I’m waiting.
GOOLSBEE: You’re going to bring in Japan?
COWEN: Yes.
GOOLSBEE: And you’re going to try to claim that Japan’s low inflation is the result of something in COVID? Japan had lower inflation all along, for decades before. They were going through deflation.
COWEN: But if it was mostly supply, a supply shock would’ve gotten them out of the earlier deflation, right? A demand shock would not have.
Recommended.