Political Populism and Financial Markets

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Stöckl, S., & Rode, M. (2019). Political Populism and Financial Markets. Presented at the Annual Meeting of the European Public Choice Society 2019, Jerusalem, Israel.


Präsentation auf wissenschaftlicher Konferenz


Research on financial markets is only beginning to uncover the importance of public policy for risk assessment and asset prices. Given it’s rejection of institutionalized democratic limits and external constraints, we hypothesize in this paper that the electoral success of populist political movements should impact the risk assessment of financial markets. Still, it is a priori unclear whether there should be observable differences based on ideological orientation. Employing data from the Comparative Manifesto Project to measure the degree of populism in party programs and their ideology, we show for a sample of Western democracies that electoral success of more populist parties has a direct impact for the price volatility of financial assets in domestic markets. Particularly the political insecurity generated by populist movements on the left directly translates into financial insecurity, while the effect of right wing populism is more ambiguous.



  • Lehrstuhl für Finance
  • Institut für Finance