Inflation Narratives, Political Polarization and Policy Support – Victoria Hünewaldt

Speaker

Victoria Hünewaldt (University of  Sienna)

Abstract

We study how narratives shape public perceptions of inflation and support for mitigating policies during the recent inflation surge in Germany (2021–2023). Using an online survey experiment with a broadly representative sample of 4,150 respondents conducted in December 2024, we examine beliefs about the distributional effects of inflation and preferences for different relief measures. Respondents were randomly exposed to one of three newspaper narratives on inflation: demand-driven inflation, energy-price shocks, or corporate price gouging. In the control group, we find broad agreement across political groups that inflation disproportionately burdens lower-income households and small firms, while policy preferences remain strongly polarized. Prior to the treatment, open-ended responses reveal that most individuals primarily associate inflation with the war in Ukraine and broader supply-side disruptions. Respondents who emphasize supply-side shocks or price gouging in the open-ended question are more supportive of redistributive and regulatory policies, whereas demand-side narratives are associated with more market-oriented preferences. Experimentally, beliefs and preferences are difficult to shift on average, suggesting strongly anchored prior narratives. However, exposure to any inflation narrative substantially increases support for interventionist policies among moderate right-leaning respondents, nearly eliminating the baseline partisan gap. Our findings highlight the importance of media narratives in shaping public support for economic policy responses during periods of inflation and political polarization. 

Authors

Victoria Hünewaldt (University of  Sienna) – Max Weinig (University of Hamburg)

Room

Media Room (A-211)