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From microeconomic favouritism to macroeconomic populism

Gilles Saint-Paul, (2019), “From microeconomic favouritism to macroeconomic populism”, VoxEU, 7 March

Macroeconomic populism typically leads to higher levels of public debt, public spending, deficits, and crises. Nevertheless, this column argues that it is rational for groups of voters to vote for a populist who reflects their interests, because they will be favoured when a fiscal adjustment occurs. The greater the fiscal adjustment required, the more likely voters are to elect a populist who will discriminate between groups.

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