This event study uses economic forecasts and opinion polls to measure the response of expectations to election surprise. Use of forecast data complements older work on partisan cycles by allowing a tighter link between election and response thereby mitigating concerns of endogeneity and omitted variables. I find that forecasters respond swiftly and significantly to election surprise. I further argue that the response ought to vary across countries with different institutional foundations. In support, I find that there exist three distinct patterns in forecasters’ responses to partisan surprise corresponding to Hall and Soskice’s three varieties of capitalism.
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Shelton, C.A. The information content of elections and varieties of the partisan political business cycle. Public Choice 150, 209–240 (2012). https://doi.org/10.1007/s11127-010-9699-1
- Political business cycle
- Varieties of capitalism
- Forecast data
- Opinion polls