What Moves Policy Sentiment?

In spite of the fact that political eras in the United States are widely (and often ambiguously) defined in terms of a general policy sentiment or mood, political scientists have done little in the way of rigorous analysis regarding this subject. I argue that shifts in domestic policy sentiment along a liberal–conservative continuum may be understood in part as responses to changing economic expectations. Specifically, expectations of a strong economy result in greater support for liberal domestic policies, whereas anticipation of declining economic conditions pushes the national policy mood to the right. Using quarterly data for the period 1968–88, I present a multiple-time-series error correction model that lends considerable support to the hypothesis.