Inequality Aversion, Populism, and the Backlash against Globalization

• 成果类型: Article
• 署名作者: Pastor, Lubos; Veronesi, Pietro
• 署名单位: University of Chicago; National Bureau of Economic Research; Centre for Economic Policy Research - UK; National Bank of Slovakia
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/jofi.13081
• 发表日期: 2021
• 页码: 2857-2906
• 关键词: income-distribution; dynamic equilibrium; RISK; Heterogeneity; COMPETITION; consumption; preferences; integration; happiness; fairness

摘要

Motivated by the recent rise of populism in Western democracies, we develop a tractable equilibrium model in which a populist backlash emerges endogenously in a strong economy. In the model, voters dislike inequality, especially the high consumption of elites. Economic growth exacerbates inequality due to heterogeneity in preferences , which leads to heterogeneity in returns on capital. In response to rising inequality, voters optimally elect a populist promising to end globalization. Equality is a luxury good. Countries with more inequality, higher financial development, and trade deficits are more vulnerable to populism, both in the model and in the data.