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Presidential Signaling in a Market Economy
Author(s) -
ESHBAUGHSOHA MATTHEW
Publication year - 2005
Publication title -
presidential studies quarterly
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.337
H-Index - 5
eISSN - 1741-5705
pISSN - 0360-4918
DOI - 10.1111/j.1741-5705.2005.00273.x
Subject(s) - presidential system , treasury , affect (linguistics) , argument (complex analysis) , credibility , economics , political science , political economy , economy , law , sociology , politics , communication , biochemistry , chemistry
Presidential leadership of the economy is vital to presidential success. Although research supports some presidential influence over the economy, consensus holds that presidents do not affect it consistently. Nevertheless, scholars have not examined the impact of the president's public statements on the economy. From signaling and anticipative reactions theories, I develop expectations for when presidential signals should affect the marketplace. I use impact assessment methodology to test this argument across three dependent variables: the daily price of oil, the daily yield on the thirty‐year Treasury bill, and monthly measures of the money supply. Signals tend to influence the market in the short term given the president's unitary authority and his credibility to affect the economy.