RICHMOND, Va. (WWBT) - However the election ultimately impacts the economy, experts say the economic impact will still be trumped by the coronavirus pandemic.
Tom Arnold, a professor of finance at the University of Richmond, says whether or not power changes hands in the White House, the stock market would thrive, also predicting that companies may start hiring again next year, as they adapt to the pandemic.
“Presidential elections always have a significant impact because it’s always going to be what’s going to happen domestically: with a tax structure, or even incentives for particular industries," he said.
Arnold also gave insight into what the election could spell out for the world of finance. For example, what former Vice President Joe Biden and President Donald Trump bring to the table in terms of stimulus packages:
“Biden’s package is more or less the Democratic package that passed in the House over the summer, so it was around $3 trillion, and it was being negotiated down to the $2 trillion range. President Trump suggested that the Republicans move up from their original proposal, which was around $1 trillion.”
He adds that the stock market is driven by tech and online activity - like consumer spending - but that a win from either party would be beneficial.
"If it was very much Republican-controlled, that would mean less regulations on taxes. If it wound up being Democratic-controlled, that means probably a bigger stimulus package.”
But the elephant in the economic room remains the coronavirus. As the country continues to operate in the pandemic, however, Arnold predicts hiring to eventually pick up again.
“I would think that hiring would startup, if not at the beginning of the year, I would say shortly after a positive result on a vaccine. Where the job market is a little tough, though, is in white-collar jobs that are looking at cuts. And some of that comes down to the streamlining with people working from home, and companies are going ‘we could do more of this or a mix of this’, and that’s changing their workforce.”
Arnold adds that the uniqueness with the current economy is that the problems it faces aren’t 100% economically tied, like a failing industry or banks. But while the election will have its effects, the long-term changes may not be seen until after the pandemic passes.
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