Ideology, (Mis)Information and the Demand for Populist Anti-inflationary Policy: Evidence from Argentina

Seminario de investigación del IIEP
Ideology, (Mis)Information and the Demand for Populist Anti-inflationary Policy: Evidence from Argentina

Expositor | Lucas Ronconi | UBA-CONICET, PEP & IZA

Resumen
We design and implement a novel survey experiment to analyze the demand for two starkly different anti-inflation policy alternatives in Argentina: Price controls and limits on monetary emission. Contrary to standard economic theory, we document that: (1) A large share of voters considers price controls as more or equally effective than monetary policy to reduce high-and-persistent inflation. (2) Political views and ideology are strongly correlated with this demand; while individual characteristics such as patience, income and employment status are only marginally correlated. We then expose individuals to simple and accurate economic information treatments about the links between money emissions and inflation (T1) and concentration in the retail sector (T2). Both treatments significantly increase the demand for limits on monetary emission vis-à-vis price controls. Treatment effects do not vary much across individuals with different ideology and beliefs, suggesting that the main mechanism driving the results is prompting.

Autores | Philip Keefer (Inter-American Development Bank) y Lucas Ronconi (UBA-CONICET, PEP & IZA)

Lugar | FCE-UBA | Aula Olivera