One keeps hearing that the euro crisis could doom Obama’s chances for reelection. (Because, after all, that’s the reason we should be concerned about the economy: its effects on politics.) I’m not so sure. Voters are hardly well informed, but if the Eurozone goes into deep recession and the U.S. into a mild one, won’t voters discount economic performance a great deal by looking at the cross-national difference? U.S. GDP growth of about 2% (annualized) right now is mediocre, but compared to Eurozone growth of about zero, it looks pretty good. Powell and Whitten (1993) and Whitten and Palmer (1999) find just this in their cross-national analyses of economic voting: the models do better when you assume that voters deduct OECD growth from national growth when assessing incumbents. No one in the U.S. presidential forecasting game seems to talk about these papers.
So here’s the bleg: Has anyone actually tried doing standard-issue presidential forecasting models with a cross-national growth adjustment? If so, what are the results? I’d find it hard to believe that U.S. voters are all that different from European voters in this respect. If no one’s looked at this, it seems to me that we need to put a firm thumb on the scale in favor of Obama when assessing the forecasts being released now.