Economy
Even professional economists can’t escape political bias
Political Bias: A study led by economist Aeimit Lakdawala reveals that Republican-leaning economists tend to predict higher GDP growth during Republican presidencies, resulting in less accurate forecasts. This partisan bias, stemming from differing views on tax policy, highlights how even trained professionals can be influenced by ideology, particularly in uncertain economic data.
Aeimit Lakdawala, Wake Forest University
Even professional economists can’t escape political bias
Republican-leaning economists tend to predict stronger economic growth when a Republican is president than Democrats do – and because of this partisan optimism, their forecasts end up being less accurate.
I’m an economist, and my colleagues and I found this by analyzing nearly 40 years of responses to The Wall Street Journal’s Economic Forecasting Survey. Unlike most such surveys, the Journal publishes each forecaster’s name, allowing us to link their predictions to their political affiliations.
The respondents were professional economists at major banks, consulting firms and universities whose forecasts help guide financial markets and business decisions. Out of more than 300 economists in our sample, we could identify the political affiliations of 122. We did this by looking at the forecasters’ political donation records, voter registration data and work histories with partisan groups.
The pattern was striking: Republican forecasters systematically predicted higher gross domestic product growth when their party controlled the presidency, representing roughly 10% to 15% of average growth rates during our study period.
When we examined forecast accuracy using real-time GDP data, Republican forecasters made larger errors when their preferred party held office. This suggests partisan optimism makes their professional judgment worse.
What makes this finding particularly notable is its asymmetry. The partisan gap emerged specifically during Republican presidencies. Under Democratic Presidents Bill Clinton, Barack Obama and Joe Biden, Republican and Democratic forecasters made virtually identical predictions. That wasn’t the case when George W. Bush, and later Donald Trump, occupied the White House.
Interestingly, this bias appears only in GDP forecasts. When we analyzed predictions for inflation, unemployment and interest rates, we found no systematic differences between Republican and Democratic forecasters.
That makes sense, because GDP forecasts are inherently more uncertain than other economic predictions. Professional forecasters tend to disagree more and make more mistakes when predicting GDP compared to inflation or unemployment rates. This creates opportunities for partisan ideologies to sneak in.
We traced the bias to different views about the effectiveness of tax policies. Using Google Trends data to measure when tax cuts were in the news, we found Republican forecasters become systematically more optimistic precisely when tax policy discussions heat up.
Why it matters
Previous research has found that most people have a strong partisan bias when they make economic predictions. Our work is the first to show that professional economists can also succumb to such influences – despite their training and market incentives to be accurate.
Their errors can come at a high price. Financial markets, policymakers and businesses rely on economists’ forecasts to make major decisions. When the Federal Reserve sets interest rates, when companies plan investments and when investors allocate portfolios, they often reference these professional consensus forecasts.
Our research challenges a common assumption in economics: that aggregating diverse expert forecasts eliminates individual biases and improves accuracy.
This doesn’t mean professional forecasters are incompetent or dishonest. These are highly trained economists with strong financial incentives for accuracy. Rather, our findings reveal how even experts with the best intentions can be unconsciously influenced by their own ideological beliefs – especially when dealing with inherently uncertain data.
What still isn’t known
Several important questions remain unanswered. It’s unclear how this bias might be reduced. Would making forecasters more aware of their political leanings help reduce the effect? Or would developing new forecasting methods that weight predictions based on historical accuracy during different political regimes improve consensus forecasts?
We’re also curious whether institutional factors matter. Might forecasters at institutions with explicit political diversity policies show less bias? How do international forecasters viewing the U.S. economy compare to domestic ones?
Finally, our research focuses on U.S. forecasters during a period of increasing political polarization. Whether similar patterns emerge in other countries with different political systems, or during less polarized times, remains an open question.
The Research Brief is a short take on interesting academic work.
Aeimit Lakdawala, Associate Professor of Economics, Wake Forest University
This article is republished from The Conversation under a Creative Commons license. Read the original article.
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News
Money Management: The Importance of Financial Literacy
You may have mastered the core subjects like math and grammar in school, but financial literacy – or understanding the basics of money management in order to help you make better financial decisions – often goes overlooked before adulthood. It’s not so much a course of study as it is a plan of action. When you understand how to earn, save, spend and invest wisely, you aren’t just building a stable future for yourself, but your family and community as well.
(Feature Impact) You may have mastered the core subjects like math and grammar in school, but financial literacy – or understanding the basics of money management in order to help you make better financial decisions – often goes overlooked before adulthood. It’s not so much a course of study as it is a plan of action.
Financial literacy in the United States has remained stagnant at generally low levels for several years, according to research from TIAA Institute and the Global Financial Literacy Excellence Center, with even lower levels among Gen Z. Yet greater financial literacy – including key aspects such as goal-setting, budgeting, saving, credit management and investing – is strongly linked to better financial outcomes, including lower rates of debt constraint and financial fragility.
While emboldening yourself to understand financial terms can be a little overwhelming at first, once you have a grasp of basic concepts you can begin to get a handle on your money and make better financial decisions. Simply put: When you understand how to earn, save, spend and invest wisely, you aren’t just building a stable future for yourself, but your family and community as well.
From nonprofit partnerships to volunteer-led programs and fee online resources, Schwab and its employees help millions of people every year build the knowledge and confidence to take charge of their financial futures by serving as board members, mentors, role models and educators.
Because financial health is a lifelong journey, the earlier people learn vital money skills, the better. That’s why the financial advisory services provider develops education programs geared toward kids that continue into adulthood, helping people no matter where they are on their journeys.
Talk Money
It’s never too early to start a conversation about financial literacy. Having teens identify goals that are important to them – such as concert tickets or a first car – can kickstart coversations about money. Working with your child (and a financial advisor, if necessary) on a plan for saving to realize those goals can serve as a jumping off point. After achieving some success, their enthusiasm may grow, which is a powerful motivator to keep saving.
Support School Initiatives and Programs
Outreach programs that empower young people to make smart financial decisions is key to a bright future. Programs like Money Matters – Schwab’s flagship financial education program utilized by the Boys & Girls Clubs of America – gives young people hands-on experience with all aspects of money and investing.
This example, and others, don’t just include program funding – they build partnerships that create impact and opportunity with national collaborations that reach more than 17 million youth annually, empowering young people with the tools and confidence to make smart financial decisions for life.
Spread the Financial Love
Championing financial literacy empowers everyone – individuals, families and communities. By serving as a board member, mentor, role model or educator to help bring financial literacy to others in your community, you can supply the tools and knowledge to lead programs that focus on giving back, empowering future generations in countless ways.
To learn more about financial literacy and find resources to empower your local community, visit SchwabMoneywise.com.
Photo courtesy of Shutterstock
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Our Lifestyle section on STM Daily News is a hub of inspiration and practical information, offering a range of articles that touch on various aspects of daily life. From tips on family finances to guides for maintaining health and wellness, we strive to empower our readers with knowledge and resources to enhance their lifestyles. Whether you’re seeking outdoor activity ideas, fashion trends, or travel recommendations, our lifestyle section has got you covered. Visit us today at https://stmdailynews.com/category/lifestyle/ and embark on a journey of discovery and self-improvement.
SUVs and EVs Take Center Stage at the 2026 New York International Auto Show
(Feature Impact) The 2026 New York International Auto Show is shining a spotlight on the latest in automotive innovation, from advanced technology to the growing shift toward electric vehicles. One automaker, Kia, is using the show to highlight two versatile SUVs designed to offer more space, capability and flexibility for modern drivers.
Watch this video to learn more
The all-new 2027 Kia Seltos has grown in size, offering a roomier interior with additional legroom, headroom and cargo space. It also adds a hybrid powertrain, making it the only vehicle in its class with three powertrain options. The SUV comes packed with advanced safety features, a more capable all-wheel-drive system and premium interior touches, including dual 12.3-inch display screens and an available panoramic sunroof.
The automaker is also showcasing the all-electric EV3, a compact SUV designed to make electric vehicle ownership more practical. With an estimated range of up to 320 miles, fast-charging capability and optional all-wheel drive, it balances performance, technology and everyday usability. Its intuitive features and flexible design make transitioning to electric simpler for a wider range of drivers.
Both models represent Kia’s commitment to providing options that blend capability, innovation and style. To learn more, visit Kia.com.
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Welcome to the Consumer Corner section of STM Daily News, your ultimate destination for savvy shopping and informed decision-making! Dive into a treasure trove of insights and reviews covering everything from the hottest toys that spark joy in your little ones to the latest electronic gadgets that simplify your life. Explore our comprehensive guides on stylish home furnishings, discover smart tips for buying a home or enhancing your living space with creative improvement ideas, and get the lowdown on the best cars through our detailed auto reviews. Whether you’re making a major purchase or simply seeking inspiration, the Consumer Corner is here to empower you every step of the way—unlock the keys to becoming a smarter consumer today!
Economy
Feeding the Economy Report Says U.S. Food, Agriculture Add $10.4 Trillion
The 2026 Feeding the Economy report says U.S. food and agriculture industries generate $10.4 trillion in economic value and support 48.7 million jobs.
New Feeding the Economy Report Highlights Food, Agriculture Industry Strength
America’s food and agriculture industries generated more than $10.4 trillion in economic value in 2026, accounting for nearly 20% of the U.S. economy, according to the 10th annual Feeding the Economy report released by 35 food and agriculture groups. The new farm-to-fork study also found the sector supports 48.7 million jobs nationwide, including 24.3 million direct jobs across farming, food manufacturing, processing, distribution, retail, and foodservice.
The report points to continued resilience despite inflation, trade uncertainty, and ongoing pressure on farmers and producers. It found food and agriculture generate more than $3 trillion in wages and $1.35 trillion in tax revenue, while U.S. exports totaled $177.3 billion. At the same time, the study flagged softer areas to watch, including flat direct employment in production agriculture and food manufacturing, along with a year-over-year decline in exports. For the food and beverage industry, the report reinforces just how deeply agriculture remains tied to jobs, supply chains, and broader economic stability.
Source:
Tenth Annual “Feeding the Economy” Report Demonstrates Strength and Resilience of the American Food and Agriculture Industries Amid Ongoing Economic Pressures — Feeding the Economy via PR Newswire
Further information:
Feeding the Economy
View the original press release on PR Newswire
STM Daily News is a vibrant news blog dedicated to sharing the brighter side of human experiences. Emphasizing positive, uplifting stories, the site focuses on delivering inspiring, informative, and well-researched content. With a commitment to accurate, fair, and responsible journalism, STM Daily News aims to foster a community of readers passionate about positive change and engaged in meaningful conversations. Join the movement and explore stories that celebrate the positive impacts shaping our world.
