Grading latin american presidents : a view from the stock markets

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Abstract: We use stock returns to grade presidential economic performance. In efficient markets, asset prices are unique in that they impound the long term effects of changes in the environment, including government policy. To purge national returns of state-of-the-world conditions that do not resul...

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Autores principales: Cruces, Juan José, García-Cicco, Javier
Formato: Documento de trabajo
Lenguaje:Inglés
Inglés
Publicado: Universidad Católica Argentina. Facultad de Ciencias Económicas 2019
Materias:
BENCHMARKING
MERCADO DE VALORES
DESARROLLO ECONOMICO
PRESIDENTES
Acceso en línea:https://repositorio.uca.edu.ar/handle/123456789/2280
Aporte de:
Repositorio Institucional de la Universidad Católica Argentina (UCA) de Universidad Católica Argentina
id I33-R139123456789-2280
record_format dspace
institution Universidad Católica Argentina
institution_str I-33
repository_str R-139
collection Repositorio Institucional de la Universidad Católica Argentina (UCA)
language Inglés
Inglés
topic BENCHMARKING
MERCADO DE VALORES
DESARROLLO ECONOMICO
PRESIDENTES
spellingShingle BENCHMARKING
MERCADO DE VALORES
DESARROLLO ECONOMICO
PRESIDENTES
Cruces, Juan José
García-Cicco, Javier
Grading latin american presidents : a view from the stock markets
topic_facet BENCHMARKING
MERCADO DE VALORES
DESARROLLO ECONOMICO
PRESIDENTES
description Abstract: We use stock returns to grade presidential economic performance. In efficient markets, asset prices are unique in that they impound the long term effects of changes in the environment, including government policy. To purge national returns of state-of-the-world conditions that do not result from local events, we introduce a global twin portfolio and a regional return. The twin portfolio for a country reports the return of a combination of world stocks that each month has the same industrial composition as that one country’s stock index. These benchmark external conditions are most volatile: they vary between a 295% appreciation (or tailwind under some interpretations) and a 30% reduction (or headwind) in asset prices over extreme four-year presidencies in our sample. We interpret the gap of national performance over these counterfactual returns as a proxy for the quality of domestic policies during a given presidency, as seen from the standpoint of equity investors. We apply this approach to seven Latin American countries from 1980 until 2011. From this perspective, Colombia, Peru and Chile stand out as the countries that have implemented the best long run policies over the sample. In addition, we provide a grading of relative presidential performance.
format Documento de trabajo
author Cruces, Juan José
García-Cicco, Javier
author_facet Cruces, Juan José
García-Cicco, Javier
author_sort Cruces, Juan José
title Grading latin american presidents : a view from the stock markets
title_short Grading latin american presidents : a view from the stock markets
title_full Grading latin american presidents : a view from the stock markets
title_fullStr Grading latin american presidents : a view from the stock markets
title_full_unstemmed Grading latin american presidents : a view from the stock markets
title_sort grading latin american presidents : a view from the stock markets
publisher Universidad Católica Argentina. Facultad de Ciencias Económicas
publishDate 2019
url https://repositorio.uca.edu.ar/handle/123456789/2280
work_keys_str_mv AT crucesjuanjose gradinglatinamericanpresidentsaviewfromthestockmarkets
AT garciaciccojavier gradinglatinamericanpresidentsaviewfromthestockmarkets
bdutipo_str Repositorios
_version_ 1764820526222540803

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