Presidential Cycles in the USA and the Dollar-Pound Exchange Rate: Evidence from Over Two Centuries

Title

PRESIDENTIAL CYCLES IN THE USA AND THE DOLLAR-POUND EXCHANGE RATE:EVIDENCE FROM OVER TWO CENTURIES

Authors

Rangan Gupta
(Department of Economics, University of Pretoria South Africa)
Mark E. Wohar
(College of Business Administration, University of Nebraska at Omaha, USA)

Abstract

In this paper, we analyze the impact of the U.S. presidential cycles on the dollar relative to the(or threshold generalized autoregressive conditional heteroscedasticity (GARCH)) model. The
usage of over two centuries of data controls for sample selection bias, while a GJR model
accommodates for omitted variable bias. We find that over the entire sample period, the
Democratic regime has indeed depreciated the dollar relative to the pound. However, during
the post Bretton Woods era, the depreciation of the dollar is not statistically significant under
the Democratic presidents.

Keywords

Exchange Rate, U.S. Presidential Cycles

Classification-JEL

C32, D72, F31

Pages

151-163

https://doi.org/10.47654/v23y2019i2p151-163