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.

During the project, small group interviews were conducted in two major German cities, Bochum and Leipzig. These interviews took place on May 9th and 10th in Bochum and on May 11th and 12th, 2023, in Leipzig. In each city, six small group interviews were held, each with four participants, lasting approximately 90 minutes.

The groups were intentionally composed to be heterogeneous, considering factors such as gender, age, residential area (urban, suburban, or rural), education, employment status (including full-time, part-time, and retired), migration background, and political party preference. Additionally, in each city, two groups were formed based on educational background: one comprising individuals with a university degree and another with secondary school qualifications or lower.

The discussions covered broad questions on economic topics, with each group delving into two specific issues in detail. At the end, participants were presented with overarching guiding principles, derived from various political perspectives, in the form of short statements for discussion.

Building on the small group interviews, a nationwide survey was designed to explore the extent to which specific attitudes and narratives resonated more or less with the population. Some phrases and expressions from the small group discussions were tested in the survey to understand how different formulations influence people’s attitudes.

The survey was conducted online by SAGO from October 18th to October 30th, 2024, with 1,968 respondents. The sample was representative of Germany’s population aged 16 to 80, reflecting distributions in age, gender, education level, and federal states. Recruitment also followed quotas for gender within all age groups, education within all age groups, and education within federal states. Deviations from population parameters were minimal and were corrected using weighting adjustments.