The political impact of inflation: a survey experiment

Lee, Neil ORCID: 0000-0002-4138-7163, Pardy, Martina and Mcneil, Andrew ORCID: 0000-0003-0791-9143 (2024) The political impact of inflation: a survey experiment. III Working Papers (140). International Inequalities Institute, London School of Economics and Political Science, London, UK.

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Abstract

The early 2020s saw a spike in inflation across much of the advanced world, with pervasive economic consequences. There is strong evidence that economic shocks generally have political consequences, but few studies have specifically focused on inflation. In this paper, we address this gap using an original, pre-registered survey experiment in the United Kingdom, a country which saw the highest consumer price inflation in 40 years and a major cost of living crisis. First, we describe how individuals, on average, are only neutral in their confidence in the Bank of England’s and economists’ ability to tackle inflation. The population is even more pessimistic regarding the government’s abilities. Second, using an experimental survey vignette, we causally identify the effect of reminding and/or informing participants about the high levels of inflation. While our treatment shifts inflation expectations, we find no evidence that it reduces trust in government, the bank of England, nor economists more generally. Instead, we find weak evidence that respondents blame corporations. Inflation also makes citizens less likely to support public sector pay rises although we find no effect on authoritarianism, redistribution attitudes, attitudes towards overseas trade, or optimism towards the future.

Item Type:	Monograph (Working Paper)
Official URL:	https://www.lse.ac.uk/International-Inequalities
Additional Information:	© 2024 The Authors
Divisions:	Geography & Environment International Inequalities Institute
Subjects:	J Political Science > JA Political science (General) H Social Sciences > HC Economic History and Conditions
JEL classification:	E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level; Inflation; Deflation D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General
Date Deposited:	20 Jun 2024 08:09
Last Modified:	01 Nov 2024 05:00
URI:	http://eprints.lse.ac.uk/id/eprint/123926

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