DP13798 Stable genius? The macroeconomic impact of Trump

Author(s): Benjamin Born, Gernot Müller, Moritz Schularick, Petr Sedlacek
Publication Date: June 2019
Keyword(s): counterfactual, Economic Growth, Macroeconomic Performance, President Trump, stable genius, synthetic control method
JEL(s): E30, E60
Programme Areas: Monetary Economics and Fluctuations
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13798

How much credit does Donald Trump deserve for the macroeconomic performance of the US economy? Growth and job creation have been robust during the first 2.5 years since he took office, but this does not prove that Trump made a difference. In this note we develop a counterfactual scenario for how the US economy would have evolved without Trump---we let a matching algorithm determine which combination of other economies best resembles the pre-election path of the US economy. We then compare the post-election performance of the US economy to this synthetic "doppelganger". For now there is little evidence for a Trump effect.