Event

Economic Shocks and Populism: The Political Implications of Reference-Dependent Preferences by Nicola Pavoni

Join Professor Nicola Pavoni for this event, which is part of the Macroeconomics Research Seminar Series, Spring Term 2022

  • Wed 9 Mar 22

    16:00 - 17:30

  • Colchester Campus

    5B.307

  • Event speaker

    Nicola Pavoni

  • Event type

    Lectures, talks and seminars
    Macroeconomics Research Seminar Series

  • Event organiser

    Economics, Department of

Join Professor Nicola Pavoni presenting research on Economic Shocks and Populism: The Political Implications of Reference-Dependent Preferences

Economic Shocks and Populism: The Political Implications of Reference-Dependent Preferences by Nicola Pavoni

Join us for this weeks Macroeconomics Research Seminar, Spring Term 2022.

Professor Nicola Pavoni from the Department of Economics, at the University of Bocconi will present research on Economic Shocks and Populism: The Political Implications of Reference-Dependent Preferences.

Abstract

This paper studies electoral competition over redistributive taxes between a safe incumbent and a risky opponent. As in prospect theory, economically disappointed voters become risk lovers, and hence are attracted by the more risky candidate. We show that, after a large adverse economic shock, the equilibrium can display policy divergence: the intrinsically more risky candidate proposes lower taxes and is supported by a coalition of very rich and very disappointed voters, while the safe candidate proposes higher taxes. This can explain why new populist parties are often supported by economically dissatisfied voters and yet they run on economic policy platforms of low redistribution. We show that survey data on the German SOEP are consistent with our theoretical predictions on voters’ behavior.

This seminar will be held on campus. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Macroeconomics Research Seminar Series.

 

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Contact the seminar organisers
Dr Alexander Clymo Department of Economics
University of Essex
Department of Economics University of Essex
Wivenhoe Park, Colchester, CO4 3SQ
Telephone: 01206 872728

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