The Politics of Inflation: How Political Elites Explain Rising Prices

Joshua Cova

Rising inflation across Europe between 2021 and 2023 has revived old debates about what drives prices up and how governments should respond. Much like during the 1970s, explanations have differed not only among economists but also across political parties and countries. This project examines how political elites understand and explain the causes of inflation, asking whether these interpretations vary between party families and national contexts. Drawing on theories from political economy and macroeconomics, it analyzes large collections of digitized parliamentary speeches from multiple European countries from the 1970s to today to systematically uncover what policymakers identify as the causes of inflation. Using natural language processing (NLP) techniques, the project identifies patterns in how policymakers attribute responsibility for inflation (i.e., whether to global shocks, fiscal policy, or labor markets) and explores how these explanations reflect broader political ideologies. By tracing how different party families have framed inflation over time, the project contributes to understanding the political dimensions of economic policymaking and how narratives and policy paradigms shape the interpretation of economic phenomena.