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Political macroeconomy refers to the interconnection between macroeconomic politics and macroeconomic performance. The expectational Phillips curve may be used to examine the economic aspects of this interrelation. Macroeconomic politics relates to voter behavior, presidential reelection ambition, partisan economic priorities, and special interests. These factors impact the fiscal and monetary policy actions of the president, Congress, and central bank. According to the electoral effect, presidents attempt to boost the economy before an election to increase reelection votes. According to the partisan effect, conservative presidencies are relatively inflation averse, while liberal administrations are relatively unemployment averse. The evidence, however, suggests that the electoral and partisan effects occurred idiosyncratically in the U.S. economy during 1961-2016. The economy also affects presidential approval, Congressional elections, consumer sentiment, voter participation, and macropartisanship. An international dimension of the political macroeconomy is the issue of free trade versus protectionism and the perspectives of economic liberalism, neomercantilism, and structuralism.

This book considers the interrelation among macroeconomic politics, macroeconomic policymakers, macroeconomic policies, and macroeconomic performance. This interaction is examined using the expectational Phillips curve model, which measures macroeconomic outcomes in terms of inflation and unemployment. In this book, the subject of macroeconomic politics mainly focuses on voter behavior, presidential re-election ambition, and political party priorities. These factors influence the macroeconomic policy actions of the president, Congress, and the central bank. This analysis takes into account both fiscal and monetary policies. Our examination of citizen sentiment is based on rational voter theory and the median voter model. We compare the effects of macroeconomic farsightedness versus shortsightedness among voters. We also contrast the conservative versus liberal perspectives on macroeconomic policy and performance. The empirical component of our analysis examines the electoral and partisan political business cycle effects upon the U.S. economy, and we find evidence of idiosyncratic effects during the time frame of 1961 through 2014. Finally, we discuss macroeconomic influence on various measures of voter sentiment, such as presidential job approval as well as presidential and congressional election outcomes.