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Political Economy

Paper Session

Sunday, Jan. 5, 2020 1:00 PM - 3:00 PM (PDT)

Marriott Marquis, Presidio 2
Hosted By: American Economic Association
  • Chair: Ruixue Jia, University of California-San Diego

Does Nonviolence Work? The U.S. House and the Civil Rights Movement

Gabor Nyeki
,
Princeton and African School of Economics

Abstract

Are peaceful or violent protests more effective at changing policy? The question has renewed importance for today’s protest movements. For an answer, I look at the U.S. Civil Rights Era. I study the effect of pro-civil rights protests on legislator votes in the U.S. House. Using a fixed-effects specification, my identifying variation is changes within the congressional district over time. I find that peaceful protests made representation more liberal on civil rights-related roll calls, consistent with the goals of the Civil Rights Movement, by shifting the tails of the distribution. Election turnout and the population share of Republican votes also increased, likely reflecting the party realignment that started in the era. There were no effects on environmental or defense-related roll calls. By contrast, evidence suggests that violent protests backfired and made representation more conservative on crime. I explore alternative explanations for these results and show that the effects of peaceful protests are robust, while the effect of violent protests may have been driven by newspaper reporting.

Policy Uncertainty and Bank Mortgage Credit

Gazi Kara
,
Federal Reserve Board
Youngsuk Yook
,
Federal Reserve Board

Abstract

We document that banks reduce supply of jumbo mortgage loans when policy uncertainty increases as measured by the timing of US gubernatorial elections in banks' headquarter states. The reduction is larger for term-limited elections and close elections. We utilize high-frequency, geographically granular loan-level data to address an identification problem arising from changing demand for loans: (1) the data allows for a difference-in-difference specification with state/time fixed effects; (2) the results hold at the county level; (3) banks reduce lending not just in their home states but also outside their home states when their home states hold elections; (4) we observe important cross-sectional differences in the way banks with different characteristics respond to policy uncertainty. Overall, the findings suggest that policy uncertainty has a real effect on residential housing markets through banks' credit supply decisions and that it can spill over across states through lending by banks serving multiple states.

The Impact of United States Presidential Debates on Exchange Rates

Stefan Eichler
,
Dresden University of Technology
Jantke de Boer
,
Dresden University of Technology
Ingmar Roevekamp
,
Dresden University of Technology

Abstract

In this paper, we study the impact of United States (US) presidential election debates on exchange rates of 96 currencies from 1996 to 2016, covering 21 debates. We show that presidential debates are followed by an immediate depreciation of the US dollar against foreign currencies that can be driven by a resolution of uncertainty. This is even stronger for heavily traded currencies. However, the trend reverses in the course of the following day, the US dollar significantly appreciates against foreign currencies. An interaction of the changing intraday election probabilities of the candidates with their policy positions and macroeconomic variables of underlying countries can explain a country-specific heterogeneous transmission of presidential debates on exchange rates. We find that currencies of countries with high real integration (trade) with the US statistically significantly depreciate if the winner of the debate promotes more protectionism than his opponent. However, the effect is only short-term and disappears on the following day. We find no support for policy positions that promote military, internationalism and immigration. The results indicate that the candidates’ positions regarding protectionism is the main channel of interest for exchange rate determination immediately after US presidential debates.

The Economic Consequences of Political Hierarchy: Evidence from Regime Changes in China, AD1000-2000

Ruixue Jia
,
University of California-San Diego

Abstract

TBD
JEL Classifications
  • P1 - Capitalist Systems