The study uses a broad but specific definition of populism as a political style focusing on the ‘people’ against the ‘establishment’ or ‘elite.’ Definitions vary across research, leading to different results, but the current rising trend is clear regardless of methodology. Establishment leaders are alarmed, adopting populist party policies and rhetoric, exemplified by UK Labour leader Sir Keir Starmer’s tough stance on immigration, warning the UK risks becoming an ‘island of strangers.’ Populists can wield immense power even without holding government positions. A comprehensive study published in the American Economic Review by three economists from the Kiel Institute analyzes how economic aspects are affected by populists in power. It found a real GDP per capita decline of over 10% after 15 years of populist leadership compared to a reasonable non-populist scenario.

Economies led by populists suffer widely regardless of whether governments are left or right-wing or located in Europe or South America. Populist leaders tend to stay in office for two or more terms, usually longer than non-populists—eight years versus four on average. Populism also tends to be sequential; a country is more likely to experience an additional populist leadership period once it has elected one. The study notes Trump’s tendency to exceed executive limits, such as deploying troops to Los Angeles and Washington, and his repeated hints at running for president in 2028. Time may be limited for some populists, exemplified by the UK Reform Party led by Nigel Farage, leading opinion polls since April. Various explanations for populism’s rise include research showing that slower real income growth since 2020 in the US strongly influenced states to shift towards electing Trump between 2020 and 2024, with slower-growing cities shifting more.

Conversely, no link was found between inflation and the shift towards Trump, despite widespread post-election claims. Strong communication from a moderate, convincing, and charismatic person can disrupt populist party narratives significantly.