Seoul Journal of Economics - Vol. 34 , No. 1

[ Article ]
Seoul Journal of Economics - Vol. 34, No. 1, pp. 17-25
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2021
Received 08 Feb 2021 Accepted 08 Feb 2021
DOI: https://doi.org/10.22904/sje.2021.34.1.002

What to Expect in the Wake of the 2020 U.S. Elections
Steven J. Davis
Steven J. Davis, William H. Abbot Distinguished Service Professor of International Business and Economics, University of Chicago Booth School of Business, Senior Fellow at the Hoover Institution, and Senior Fellow with the Asian Bureau of Finance and Economics Research, Tel: +1 773 702 7312 (Steven.Davis@chicagobooth.edu)

JEL Classification: E52, E66


The 2020 U.S. elections produced a close, but clear, victory for Democratic nominee Joe Biden in the presidential contest, a surprisingly slim majority for the Democratic party in the House of Representatives, and an even 50-50 split between Republicans and Democrats in the Senate.1 Newly elected Democratic Vice President Kamala Harris holds the deciding vote for party control in the Senate. Thus, the Democratic party now controls the executive branch of the federal government and both Houses of Congress – a huge shift in the balance of political power.

Keywords: U.S. economic policy outlook, Structural shift, COVID-19 pandemic


This essay, prepared for the Seoul Journal of Economics, draws on my remarks at the TV Chosun Global Leaders Forum in Seoul on 6 November 2020.

1. Althoff, Lukas, Fabian Eckert, Sharat Ganapati and Conor Walsh. “The City Paradox: Skilled Services and Remote Work.” CESifo Working Paper No. 8734, December 2020.
2. Altig, David, Jose Maria Barrero, Nick Bloom, Steven J. Davis, Brent Meyer, Emil Mihaylov and Nick Parker. Firms Expect Working from Home to Triple. Macroblog, May 28, 2020a.
3. Altig, David, Jose Maria Barrero, Nick Bloom, Steven J. Davis, Brent Meyer, Emil Mihaylov and Nick Parker. Business Anticipate Slashing Post-Pandemic Travel Budgets. Macroblog, August 4, 2020b.
4. Baker, Scott, Nicholas Bloom, Steven J. Davis and John Van Reenen. Economic Recovery and Policy Uncertainty in the US. VoxEU CEPR Policy Portal, October 29, 2012.
5. Barrero, Jose Maria, Nick Bloom, and Steven J. Davis, COVID-19 Is Also a Reallocation Shock. No. w27137. National Bureau of Economic Research, 2020.
6. Barrero, Jose Maria, Nick Bloom, and Steven J. Davis. COVID-19 Is a Persistent Reallocation Shock. American Economic Association Papers & Proceedings, forthcoming, 2021a.
7. Barrero, Jose Maria, Nick Bloom, and Steven J. Davis. Why Working from Home Will Stick. Becker Friedman Institute Working Paper, 2021b.
8. Bloom, Nicholas, Steven J. Davis and Yulia Zhestkova. COVID-19 Shifted Patent Applications toward Technologies that Support Working from Home. American Economic Association Papers & Proceedings, forthcoming, 2021.
9. Board of Governors of the Federal Reserve System. 2020 Statement on Longer-Run Goals of Monetary Policy Strategy (as amended on 27 August 2020), 2020.
10. Board of Governors of the Federal Reserve System, Federal Open Markets Committee. Federal Reserve Press Release, January 27, 2021.
11. BBC News. Keystone XL Pipeline: Why Is It So Disputed? January 21, 2021.
12. Biden, Joseph. Inaugural Address by Joseph R. Biden, Jr.. January 20, 2021.
13. Bordo, Michael D. and Mickey D. Levy. The Short March Back to Inflation. Wall Street Journal, February 3, 2021.
14. Congressional Budget Office. An Update to the Budget Outlook: 2020 to 2030. September 2020a.
15. Congressional Budget Office. The 2020 Long-Term Budget Outlook. September 2020b.
16. Davis, Steven J.. Regulatory Complexity and Policy Uncertainty: Headwinds of Our Own Making. Paper prepared for the Hoover Institution Conference on “Restoring Prosperity” at Stanford University, February 9-10, 2017.
17. Davis, Steven J. Comments on a `A Unified Approach to Measuring u*’ by Richard K. Crump, Stefana Eusepi, Marc Giannoni and Ayseful Sahin in the Brookings Papers on Economic Activity, 2019.
18. Davis, Steven J., Stephan Hansen and Cristhian Seminario-Amez. Firm-Level Risk Exposures and Stock Returns in the Wake of COVID-19. NBER Working Paper 27867 (revised 3 February), 2021.
19. Evans, Charles. The New Monetary Policy Framework and Some Implications for Financial Stability. A speech at the 2021 Annual Meeting of the ASSA, January 5, 2021.
20. Feng, Emily. As U.S. Views of China Grow More Negative, Chinese Support for Their Government Rises. NPR, September 23, 2020.
21. Henderson, David. Open Season for New Regulations. Defining Ideas: A Hoover Institution Journal, February 4, 2021.
22. Lee, Jinjoo. Biden’s Energy Orders: Peril and Profit. Wall Street Journal, January 27, 2021.
23. Mims, Christopher. The New Recipe for Restaurant Survival? Become the Next Domino’s. Wall Street Journal, June 6, 2020a.
24. Mims, Christopher. The Next Phase of the Retail Apocalypse: Stores Reborn as E-Commerce Warehouses. Wall Street Journal, July 18, 2020b.
25. Mulvaney, Mick and Joe Grogan. Biden Gives Regulators a Free and Heavy Hand. Wall Street Journal, January 26, 2021.
26. Naughton, Nora. The Pandemic Has Pushed Car Buying Online. It’s Expected to Stick. Wall Street Journal, June 20, 2020.
27. Politi, James. Biden Presses Ahead with Stimulus Despite Republican Opposition. Financial Times, February 3, 2021.
28. Politi, James and Katrina Manson. Biden Signals Return to Normality on First Day as President. January 20, 2021.
29. Silver, Laura, Kat Devlin and Christine Huang. Unfavorable Views of China Reach Historic Highs in Many Countries. Pew Research Center, October 6, 2020.
30. Summers, Lawrence. The Biden Stimulus Is Admirably Ambitious. But It Brings Some Big Risks, Too. Washington Post, February 4, 2021.