Economic theory suggests that government popularity may be related to the rate of change of economic quantities and the level of financial variables (like inflation or interest rates). Political theory suggests that this relationship may not be stable over time. The authors find that, although...

If voters care about the size of the government's majority, then by-election votes should exaggerate national swings. Moreover, if there is uncertainty about the outcome of the general election and if voters” preferences are skewed in such a way as to give more weight to the “downside”...

If voters care about the size of the government's majority, then by-election votes should exaggerate national swings. Moreover, if there is uncertainty about the outcome of the general election and if voters' preferences are skewed in such a way as to give more weight to the 'downside' outcome...