The US Election’s Chaos Quotient
— October 27, 2020
By Nouriel Roubini
But if the election turns out to be mostly a referendum on US President Donald Trump, Democrats might win just the White House while failing to retake the Senate. And one cannot rule out the possibility of Trump navigating a narrow path to an Electoral College victory, and of Republicans holding on to the Senate, thus reproducing the status quo.
More ominous is the prospect of a long-contested result, with both sides refusing to concede as they wage ugly legal and political battles in the courts, through the media, and on the streets. In the contested 2000 election, it took until December 12 for the matter to be decided: the Supreme Court ruled in favor of George W. Bush, and his Democratic opponent, Al Gore, gracefully conceded. Rattled by the political uncertainty, the stock market during this period fell by more than 7%. This time, the uncertainty could last for much longer – perhaps even months – implying serious risks for the markets.
Read the full Project Syndicate article.
Nouriel Roubini is a Professor of Economics and International Business and the Robert Stansky Research Faculty Fellow.