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Economic models predict clear Obama win in November

(Agencies)
Updated: 2008-08-02 00:06

WASHINGTON - It really is the economy, stupid! Economic models that have correctly predicted the winner of almost all post-war US presidential elections say recession fears will secure a victory for Barack Obama in November.

US Democratic presidential candidate Senator Barack Obama (D-IL) speaks alongside his top economic advisors during a roundtable meeting at a hotel in Washington, July 28, 2008. [Agencies]

Three separate studies showed the Democratic presidential hopeful winning between 52 and 55 percent of the popular vote on November 4, based on current gloomy economic estimates.

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Any further darkening in the economic outlook -- many analysts think things will get worse between now and November -- would reinforce that election outcome.

"The economy is certainly not going to be a positive for the Republicans," said Ray Fair, an economics professor at Yale university who built the earliest of the models in 1978.

His model, which assumed tepid US economic growth of 1.5 percent and a 3 percent rate of inflation, predicted the Republican candidate John McCain's share of the vote would be 47.8 percent, handing Obama 52.2 percent.

"It is a decent margin but it is not a landslide," said Fair, who ran the numbers in April. "It would have been much larger if there had been a recession in 2008."

US economic activity doubled in the second quarter to a 1.9 percent annualized pace. But previous data was revised lower to show output contracted 0.2 percent in the final three months of last year, the weakest performance since 2001, and expanded only slightly at the start of 2008.

"It's the economy, stupid!" was a phrase extensively used during Bill Clinton's successful 1992 presidential campaign against George H.W. Bush to remind voters that a recession occurred during Bush's administration.

Fair's model, and a version built by St. Louis-based forecasting firm Macroeconomic Advisers, blend political factors with economics to scientifically nail down the view that voters care first and foremost about their own wallets.

Indeed, opinion polls consistently find that the economy is the most important issue for US voters.

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