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Populism - What next? A first look at populist walking-stick economies

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  • Christopher Ball

    (Quinnipiac University)

  • Andreas Freytag

    (Friedrich-Schiller-University Jena, University of Stellenbosch, CESifo Research Network)

  • Miriam Kautz

    (Friedrich-Schiller-University Jena)

Abstract

The recent rise in populist governments has led to much work on the question "why now?". Our work takes the next logical step by asking "what next?". That is, given populists in power, what should we expect to be the economic consequences of populist regimes. To answer this, we characterize populist economic policies and argue that they generate an inverted J-curve effect, which we term a "walking stick" effect, in macro-level data, specifically GDP and inflation. To test this claim, we construct a unique data set on 13 Latin American countries from 1976 to 2012 and incorporate more modern and nuanced definitions of populism. Our contribution is both to test the walking stick claim and to present a novel dataset for studying the economic effects of populism. We find compelling evidence for our walking stick hypothesis in both GDP per capita and inflation, suggesting that the answer to "what next" is that we will see on average short-run booms followed by declines under populist regimes.

Suggested Citation

  • Christopher Ball & Andreas Freytag & Miriam Kautz, 2019. "Populism - What next? A first look at populist walking-stick economies," Jena Economic Research Papers 2019-009, Friedrich-Schiller-University Jena.
  • Handle: RePEc:jrp:jrpwrp:2019-009
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    References listed on IDEAS

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    Cited by:

    1. Funke, Manuel & Schularick, Moritz & Trebesch, Christoph, 2020. "Populist Leaders and the Economy," CEPR Discussion Papers 15405, C.E.P.R. Discussion Papers.
    2. Ryan H Murphy, 2020. "Does democracy die in recessions? A descriptive analysis of aggregate demand shortfalls and regime transition," Economic Affairs, Wiley Blackwell, vol. 40(1), pages 63-76, February.

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    More about this item

    Keywords

    Populism; Latin America; Business Cycle; Political Economy;
    All these keywords.

    JEL classification:

    • E39 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Other
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • N16 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Latin America; Caribbean

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