The Lost Popularity Function: Are Unemployment and Inflation no longer Relevant for the Bahaviour of German Voters?
AbstractUp to now there was a general conviction that increasing unemployment and inflation have a negative impact on the government’s popularity. This was true for Germany as well, but it does not seem to hold any longer. This paper first reviews the results of earlier periods before presenting new results for the last part of the Kohl government after unification and for the Schröder government. While the results for the former show the known pattern, neither unemployment nor inflation is significant in the equations of the Schröder government, the latter has even the wrong sign. The missing impact of unemployment might be due to statistical reasons: the short observation period and the low variance of the explanatory variables. With respect to inflation, however, the citizens might have recognised that they cannot any longer hold the government responsible as the European Central Bank is performing monetary policy in Europe since 1999 and is, therefore, also responsible for price stability in Germany.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2882.
Date of creation: 2009
Date of revision:
government popularity; popularity function; Germany; unemployment; inflation;
Find related papers by JEL classification:
- H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
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