Populism and Economic Policy

On 28 September 2018, Lorenzo Forni of Prometeia invited me to give a short comment on the relationship between ‘populism’ and economic policy-making.  Although, I hadn’t thought about that relationship before, I came up with four things I think we might want to consider (in addition to what we might useful think of as ‘populism’ in the context of the question Lorenzo asked).  My argument was that populists bring new people into the policy-making process.  They also bring a healthy dose of unpredictability.  Their messaging on policy issues is not great, which causes problems in a world defined by rational expectations, and they tend to be skeptical toward independent agencies like central banks.  Finally, populists are disinclined to international policy coordination.  The combination is not wholly bad — sometimes change is for the good! — but the results are often below the promises that populists make to the electorate.  The text of the presentation follows.

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