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Exports vs. Investment: How Public Discourse Shapes Support for External Imbalances

Author

Listed:
  • Federico Maria Ferrara

    (LSE - London School of Economics and Political Science)

  • Jörg S Haas

    (Hertie School of Governance [Berlin])

  • Andrew Peterson

    (Poitiers UFR LL - Université de Poitiers - UFR Lettres et langues - UP - Université de Poitiers = University of Poitiers, Techné [Poitiers] - Technologies numériques pour l'éducation [EA 6316] - UP - Université de Poitiers = University of Poitiers)

  • Thomas Sattler

    (UNIGE - Université de Genève = University of Geneva)

Abstract
The economic imbalances that characterize the world economy have unequally distributed costs and benefits. That raises the question how countries could run long-term external surpluses and deficits without significant opposition against the policies that generate them. We show that political discourse helps to secure public support for these policies and the resulting economic outcomes. First, a content analysis of 32,000 newspaper articles finds that the dominant interpretations of current account balances in Australia and Germany concur with very distinct perspectives: external surpluses are seen as evidence of competitiveness in Germany, while external deficits are interpreted as evidence of attractiveness for investments in Australia. Second, survey experiments in both countries suggest that exposure to these diverging interpretations has a causal effect on citizens' support for their country's economic strategy. Political discourse, thus, is crucial to provide the societal foundation of national growth strategies.

Suggested Citation

  • Federico Maria Ferrara & Jörg S Haas & Andrew Peterson & Thomas Sattler, 2022. "Exports vs. Investment: How Public Discourse Shapes Support for External Imbalances," Post-Print hal-02569351, HAL.
    • Handle: RePEc:hal:journl:hal-02569351
    DOI: 10.1093/ser/mwab004
    Note: View the original document on HAL open archive server: https://hal.science/hal-02569351v2
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    References listed on IDEAS

    as
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    Keywords

    survey experiments; text analysis; trade; capital flows; ideas; public opinion;
    All these keywords.

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