Investment Returns Under Right- and Left-Wing Governments in Australasia

31 Pages Posted: 26 Apr 2007

See all articles by Hamish D. Anderson

Hamish D. Anderson

Massey University - School of Economics and Finance

Christopher B. Malone

School of Economics and Finance, Massey University

Ben R. Marshall

Massey University - School of Economics and Finance

Date Written: April 24, 2007

Abstract

This paper considers the link between ruling political parties and stock, property, and bond returns in Australasia. Australia and New Zealand provide an ideal setting as their political systems allow a precise examination of the influences of political parties. We find higher inflation under left-leaning governments and this flows through to higher property returns during their terms. Stock markets tend to do better during right-leaning governments when inflation is lower. While there is no clear political cycle in total bond returns we find bond capital losses during terms governed by the left and capital gains are evident under right-wing governments.

Keywords: presidential puzzle, political cycle, investment returns, stock market, real estate market, property returns, bond market

JEL Classification: G14, G15

Suggested Citation

Anderson, Hamish D. and Malone, Christopher B. and Marshall, Ben R., Investment Returns Under Right- and Left-Wing Governments in Australasia (April 24, 2007). Available at SSRN: https://ssrn.com/abstract=982691 or http://dx.doi.org/10.2139/ssrn.982691

Hamish D. Anderson

Massey University - School of Economics and Finance ( email )

New Zealand

Christopher B. Malone (Contact Author)

School of Economics and Finance, Massey University ( email )

Private Bag 11-222
Palmerston North, 30974
New Zealand

Ben R. Marshall

Massey University - School of Economics and Finance ( email )

Private Bag 11-222
Palmerston North, 30974
New Zealand
64 6 350 5799 (Phone)
64 6 350 5651 (Fax)

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