Official and hidden unemployment and the popularity of the government: an econometric analysis for the Kohl government

Abstract

In this paper the relation between economic development and the popularity of the government and opposition in Germany is investigated for the period of the conservative–liberal coalition of chancellor Kohl. We estimate systems of popularity functions for the Old States from 1984 to 1996 and the New States from 1992 to 1996. It is shown that inflation and official as well as hidden unemployment have a negative impact on the government's popularity. Moreover, the de facto coalition between the SPD and the PDS in Sachsen-Anhalt in July 1994 strongly helped the Kohl government to become re-elected in October 1994.