Public understanding of the economy and paradigm shift

Long before the pandemic, there were many critical discussions about fundamental issues of economic policy, especially the role of the state. The extensive government action in response to the pandemic has further advanced debates about how we should think about and shape our economies in the future. A window of opportunity for a paradigm shift has opened and high quality work is underway to develop better models for conceptualising economic structures and processes.

While much work is being done in this area, comparatively little has been done to examine how the public perceives and understands the economy and the changes taking place around it. However, what we do know suggests that there is a large gap between advances in science and policy on the one hand and public perception on the other. Existing studies have shown that people often have little factual knowledge of basic economic concepts, or misunderstand the distribution of wealth between different population groups, as well as government redistribution.

Together with our project partner, the Forum New Economy, we aim to comprehensively investigate the public’s understanding of economic structures and processes through interviews with experts and small groups of the German population. This will provide new insights into how people in Germany think about economic policy issues and which paradigms they adhere to.