EconPapers    
Economics at your fingertips  
 

Inequality Aversion, Populism, and the Backlash Against Globalization

Lubos Pastor () and Pietro Veronesi

No 13107, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Motivated by the recent rise of populism in western democracies, we develop a model in which a populist backlash emerges endogenously in a growing economy. In the model, voters dislike inequality, especially the high consumption of ``elites." Economic growth exacerbates inequality due to heterogeneity in risk aversion. In response to rising inequality, rich-country voters optimally elect a populist promising to end globalization. Countries with more inequality, higher financial development, and current account deficits are more vulnerable to populism, both in the model and in the data. Evidence on who voted for Brexit and Trump in 2016 also supports the model.

Keywords: Brexit; Globalization; inequality; populism; risk aversion; Trump (search for similar items in EconPapers)
JEL-codes: D72 F65 G11 G12 G18 P16 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pke and nep-pol
Date: 2018-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=13107 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Inequality Aversion, Populism, and the Backlash Against Globalization (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:13107

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=13107

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2019-08-20
Handle: RePEc:cpr:ceprdp:13107