The Financial Drivers of Populism in Europe

40 Pages Posted: 23 Jun 2022

See all articles by Luigi Guiso

Luigi Guiso

Einaudi Institute for Economics and Finance (EIEF)

Helios Herrera

University of Warwick

Massimo Morelli

Bocconi University

Tommaso Sonno

University of Bologna

Date Written: June 1, 2022

Abstract

This paper identifies a specific channel through which the financial crisis has fostered populism. The financial crisis has extended economic insecurity also to segments of the population untouched by the globalization and immigration shocks. To establish causality, we use a pseudo-panel analysis and instrument the economic insecurity of different cohorts leveraging on a new methodology designed to highlight the different sensitivity to financial constraints for people in different occupations. On the supply side, we trace from manifestos the policy positions of old and new parties, showing that the supply of populism had the largest jump right after the financial crisis.

Keywords: Age-Earning Profiles, Demand and Supply of Populism, financial crisis, Fiscal space

Suggested Citation

Guiso, Luigi and Herrera, Helios and Morelli, Massimo and Sonno, Tommaso, The Financial Drivers of Populism in Europe (June 1, 2022). CEPR Discussion Paper No. DP17332, Available at SSRN: https://ssrn.com/abstract=4144649

Luigi Guiso (Contact Author)

Einaudi Institute for Economics and Finance (EIEF) ( email )

Helios Herrera

University of Warwick ( email )

Gibbet Hill Rd.
Coventry, West Midlands CV4 8UW
United Kingdom

Massimo Morelli

Bocconi University ( email )

Via Roentgen 1
Milan, 20136
Italy

Tommaso Sonno

University of Bologna ( email )

Piazza Scaravilli 2
Bologna, 40100
Italy

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