Inflation, Political Support, and Macroeconomic Policy
Douglas A. Hibbs Jr.
This chapter explores the connection between macroeconomic outcomes and political support for incumbent governments as they existed during the period of growing and high inflation. During most of the post-World War II period, the U.S. economy performed at higher rates of unemployment and lower rates of inflation than the economies of virtually all other capitalist industrial societies.1 This held true during the sustained high growth of the 1960s as well as the economic disruption and stagnation of the 1970s. The sizable difference in figure 7-1 between the unemployment records of the United States and six other industrial societies-- France, Italy, Japan, Sweden, the United Kingdom, and West Germany-- is not an artifact of unusually good performance by one or two of the other countries. On average the U.S. unemployment rate was higher, typically much higher, than that of each of the other six (table 7-1). Nor can the unemployment performance gap be attributed primarily to measurement differences (data for all of the countries are adjusted to U.S. concepts) or to differences in the composition and rate of growth of the labor force, although the heterogeneity of the labor force is a distinguishing feature of the American economy.2 However, even if it is granted that the natural rate of unemployment is somewhat higher in the United States than abroad, it is true nonetheless that postwar economic contractions____________________