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Prediction Markets and Elections
- Prediction markets, like Intrade, aggregate information from various sources.
- These markets reflect the wisdom of crowds, offering insights into election outcomes and potential economic impact.
2004 Election Market Experiment
- The 2004 election, with its leaked exit polls favoring Kerry, provided a natural experiment.
- Stock prices fell slightly during the "Kerry presidency" and rose when Bush's win was confirmed, suggesting a small market preference for Bush.
Presidential Influence on the Economy
- Presidents have limited influence on the economy, especially in short election cycles.
- Fiscal stimulus can have some effect, but broader economic forces and legislative constraints play a larger role.