While stock markets initially dropped overnight after it became clear that Donald Trump had won the presidential election, they recovered throughout the day on Wednesday. Those fluctuations support the view of one Pittsburgh economist, who says we should take a “wait and see” approach to the economy.
“You’re going to see gyrations in the stock market, in prices and so forth. And all of this is due not to who won the election, but to the uncertainty of the question, ‘What is going to come next?’” said Antony Davis, an associate professor of economics at Duquesne University. “So I think we’ll give things several weeks, probably several months, to kind of settle down as people get used to this new reality.”
Davies also argued that the economy is bigger than any individual administration.
“The fact is, as far as the economy goes, there isn’t much difference at all between a Democrat and a Republican," Davis said Wednesday morning. "They’re both interested in spending your tax dollars.”
Davis said the biggest question on his mind is what will happen to the Affordable Care Act; he said he does not expect to see the ACA repealed, but he does expect to see tweaks to the system.
“Now that the industries have figured out how to make this work within the context of the existing law, they’re going to push hard for tweaks, for alterations, in the current infrastructure rather than an outright repeal," he said.
Davis had a similar take on trade deals. Trump has said that he would work to make the playing field fairer for American companies by adding tariffs and changing trade agreements.
Davis said those changes could positively impact some sectors of the economy, but on the whole, trade restrictions are bad for the overall economy.