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Populism, Economic Policies and Central Banking: an Overview

Author(s): Ernest Gnan, Donato Masciandaro

Date published: Feb 2020

SUERF Policy Note, Issue No 131
by Ernest Gnan and Donato Masciandaro


JEL-codes: E42, E58, E6, E65, N16, P16, P26, P52, Z18.
Keywords: Populism, economic policy, central bank independence, politics and economics, political economy.

 
There seems to be general agreement that “populism“ has been on the rise over the past decade, and that it has implications for economic policies and institutions. Against this background, SUERF and the BAFFI CAREFIN Centre at Bocconi University brought together a group of experts for a one-day conference in Milan on 8 November 2019. The starting point for the project were three groups of questions:

• First, what is “economic populism“? Is it actually a new phenomenon? Is it confined to specific political camps? How would populist economic policies be classified in more conventional economic categories?
• Second, what are the sources of the rise in populism? Can economic policies contribute to a rise or decline of the current rise of populism?
• Third, how could the rise of populism affect central banks? Conversely, can independent central banks help prevent or moderate economic populism?

This article synthesizes insights from the conference, embedding them in a broader overview of populism’s interactions with economic policies and central banking. Section 1 discusses what “economic populism” might mean and proposes a comprehensive definition. Section 2 offers some lines of reasoning for the rise of populism. Section 3 summarizes how economic policies may counter populism. Section 4 explores how populism and central banking may affect each other. Section 5 summarizes and concludes.
 
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SUERF Policy Note, Issue No 131SUERF Policy Note, Issue No 131

Populism, Economic Policies and Central Banking: an OverviewWeb version: Populism, Economic Policies and Central Banking: an Overview

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