Inflation and Populist Views

This study evaluates the causal effect of provided and retrieved information about inflation on populist views and trust in institutions, treating inflation expectations as a potential mediator variable. We randomly allocate respondents into seven treatment groups, which include information treatments and priming treatments. Treatments about past inflation are designed to trigger memories of high inflation and to remind respondents of past inflation forecast errors in central bank forecasts (T1) or to point out that price increases in particular goods categories like food can be much larger than overall inflation (T2). The treatments about current and past inflation inform people of the inflation rates of the past months as well as further predictions depending on the development of the Iran war, in a basic (T3) and severe (T4) scenario. There is also an active control group, which receives information about the projected lifespan of men and women (T5) and a passive control group, that receives no information (T6). Treatments T7 and T8 do not provide any information, instead respondents are asked to write a text about the implications of rising or falling inflation for the economy and for their personal situation. These treatments thus prime respondents to retrieve information on these inflation scenarios. We analyze the impact of provided or retrieved information about inflation on posterior populist views, where agreement with randomly chosen statements in the categories populism, pluralism, elitism and xenophobia is measured both before and after the treatment. In a similar manner, we measure trust in different public institutions both before and after the treatment. Inflation expectations may be a mediator variable for the causal impact of inflation on populist views and trust and is also measured before and after the treatment.