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Exports vs. investment: how political discourse shapes popular support for external imbalances

Ferrara, Federico, Haas, Jörg Stefan, Peterson, A and Sattler, T (2022) Exports vs. investment: how political discourse shapes popular support for external imbalances. Socio-Economic Review, 20 (4). 1961 - 1989. ISSN 1475-1461

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Identification Number: 10.1093/ser/mwab004


The economic imbalances that characterize the world economy have unequally distributed costs and benefits. That raises the question of how countries could run long-term external surpluses and deficits without significant opposition against the policies that generate them. We show that political discourse helps to secure public support for these policies and the resulting economic outcomes. First, a content analysis of 32 000 newspaper articles finds that the dominant interpretations of current account balances in Australia and Germany concur with very distinct perspectives: external surpluses are seen as evidence of competitiveness in Germany, while external deficits are interpreted as evidence of attractiveness for investments in Australia. Second, survey experiments in both countries suggest that exposure to these diverging interpretations has a causal effect on citizens’ support for their country’s economic strategy. Political discourse, thus, is crucial to provide the societal foundation of national growth strategies.

Item Type: Article
Official URL:
Additional Information: © 2021 The Author(s)
Divisions: European Institute
Subjects: H Social Sciences > HB Economic Theory
J Political Science > JC Political theory
JEL classification: F - International Economics > F5 - International Relations and International Political Economy > F50 - General
F - International Economics > F1 - Trade > F10 - General
F - International Economics > F3 - International Finance > F30 - General
Date Deposited: 05 Feb 2024 10:27
Last Modified: 20 Jun 2024 01:48

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