When America sneezes, Australian state governments catch a cold. And when the weather turns bad, guess who’s held responsible?
“Last time I checked, the Tasmanian government had very little influence over the unemployment rate in the United States. Yet it might want to keep an eye on Wall Street, since the American economy has historically had a large impact on whether Australian state governments get re-elected. Analysing nearly 200 Australian state elections, Mark McLeish and I found that state governments were significantly more likely to be re-elected when the American economy was strong than when it was in recession. Raise the US unemployment rate by 1 percentage point, and the odds of an Australian state government being re-elected fall by 3 to 4 percentage points…”
Read the full article on Inside Story.