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The U.S. Presidential Election Cycle And Stock Market Returns, Georginus Ejiofor Ugwu

Doctoral Dissertations (DBA)

This paper analyzes the relationship between the presidential election year and the stock market returns in the United States by examining the monthly returns of the Standard &Poor’s 500 stock index from January 1959 to December 2019. In essence, I test whether stock market returns improve during presidential election year, consistent with the political business cycle (PBC) and its later offshoot, the ‘presidential election cycle (PEC) hypothesis, which assumes that incumbent presidents and their parties improve economic growth and the stock market outlook by embracing expansionary macroeconomic policy. I employ the Least Squares Regression tests on monthly S&P 500 index …