Under President Joe Biden, the US economy has performed much better than virtually anyone predicted. And yet voters seem not to realize it -- an apparent puzzle that has been much discussed lately.

In fact, this disconnect between popular perception and economic performance is nothing new. Since World War II, the US economy has consistently done better during Democratic administrations, yet a large share of Americans -- possibly even a majority -- believe that Republicans are better economic stewards.

At first glance, the proposition that the economy consistently performs better under one party might sound like the sort of blatantly implausible partisan claim that is not even worth checking out. But anyone who does check it out -- the relevant statistics have been compiled before, including by me -- will find that it is completely true.

In the 19 presidential terms since WWII -- from Harry S. Truman through Biden -- job creation has averaged 1.7 percent per year under Democratic administrations, compared to 1 percent under the GOP. The difference in GDP growth is even larger: 4.23 percent under Democrats, versus just 2.36 percent under Republicans. If one goes back to the Great Depression, adding the administrations of Republican Herbert Hoover and Democrat Franklin D. Roosevelt to the mix, the difference in growth rates is even larger.

Could Democratic presidents be benefiting from the legacy of good economic stewardship by Republicans? Not likely. When it comes to average growth rates, the results are similar regardless of whether one assigns responsibility for the first quarter of a president’s term to him or to his predecessor.

Even those of us who believe that Democrats pursue better economic policies than Republicans, by and large, have a hard time explaining such a big difference in performance. After all, many powerful and unpredictable factors affect economic performance, often to a far greater extent than any policy levers under the president’s control.

Furthermore, it takes more than four or even eight years for the effects of many policies, good or bad, to materialize. For example, Jimmy Carter deserves a lot of credit for appointing Paul Volcker as US Federal Reserve Chair in 1979 with a mandate to break the back of inflation. The disinflation that followed helped to set the stage for the Great Moderation of the next 20 years. But the immediate impact of Volcker’s fight against inflation was a recession. Most economists consider the eventual benefits to have been worth the initial costs. But the downturn contributed to Carter’s defeat in the 1980 presidential election.

In any case, that was the only recession in the last 100 years that began with a Democrat in the White House. The US economy has been in recession for only one out of 16 quarters of the average Democratic presidential term, compared to five quarters under Republicans.

One might be tempted to argue that this is a matter of correlation, not causation: yes, Democrats happen to have been in power during more periods of better economic performance than Republicans, but this reflects good luck. The application of universally accepted statistical methodology says otherwise.

The last five recessions all started under a Republican president: Ronald Reagan, George H.W. Bush, George W. Bush (twice), and Donald Trump. (If you’re feeling skeptical, you can check out the chronology for yourself.) If the true probability of a recession starting was exactly equal, whether a Democrat or Republican is in the White House, the odds of getting this outcome by chance would be very low: one in 32 -- (1/2)(1/2)(1/2)(1/2)(1/2) -- or 3.125 percent. You have exactly the same odds of getting “heads” on five consecutive coin-flips. Such a result is said to be “statistically significant at the 95 percent level of confidence.”

What if we go back further? There have been 17 recessions in the US in the last century. A remarkable 16 of them began when a Republican was in the White House. The odds of this outcome arising by mere chance are just one in 10,000 (17/217 = 0.00013)!

And then there is the effect of party transitions on growth -- addressed in a 2015 paper by the Princeton University economists Alan Blinder and Mark Watson. Since WWII, the party controlling the executive changed ten times. All five times that a Republican succeeded a Democrat, the growth rate fell from one term to the next. Conversely, all five times a Democrat succeeded a Republican, the growth rate rose. This is as likely as getting “heads” on ten consecutive coin tosses: one out of 1,024. The difference is thus statistically significant at the 99.9 percent level.

So, we know that the economy has performed worse under Republican presidents, and that this is not a matter of chance. What we still do not know is what, exactly, explains the much better record of Democratic presidents. That much remains a puzzle.

Jeffrey Frankel

Jeffrey Frankel, a professor of capital formation and growth at Harvard University, served as a member of US president Bill Clinton’s Council of Economic Advisers. -- Ed.

(Project Syndicate)