What Can The Economy Tell Us About 2012?

Yale economist Ray Fair's election model, which relies on GDP data, predicts that Obama will win re-election. Nate Silver spies a flaw - the relationship between GDP and employment has broken down this recession:

G.D.P. as it is usually measured did not mirror employment the way it normally does.

That is problematic for models like Mr. Fair’s. What we’d like to see is what happened in the past when there had been a similar discrepancy: when the economy performed all right according to G.D.P., but very poorly according to employment. However, since violations of Okun’s law are fairly rare, and since presidential elections are also fairly rare, there are really no good data points to work with: an econometrician would say the solution lies “out of sample.”