Discussion paper

DP17332 The Financial Drivers of Populism in Europe

This paper identifies a specific channel through which the financial crisis has fostered populism. The financial crisis has extended economic insecurity also to segments of the population untouched by the globalization and immigration shocks. To establish causality, we use a pseudo-panel analysis and instrument the economic insecurity of different cohorts leveraging on a new methodology designed to highlight the different sensitivity to financial constraints for people in different occupations. On the supply side, we trace from manifestos the policy positions of old and new parties, showing that the supply of populism had the largest jump right after the financial crisis.


Guiso, L, M Morelli, T Sonno and H Herrera (2022), ‘DP17332 The Financial Drivers of Populism in Europe‘, CEPR Discussion Paper No. 17332. CEPR Press, Paris & London. https://cepr.org/publications/dp17332