Populism, on both the right and the left, has spread like wildfire throughout Europe and the United States and is making inroads in other parts of the world. In simplest terms, populism is a political ideology that vilifies elites, minorities, and foreigners while lionizing "the people."

In The Populist Temptation, Barry Eichengreen places this global resurgence of populism in its historical context. Populists have always thrived, he observes, in times of poor economic performance. Populism feeds on rising inequality, which augments the ranks of those left behind and fans dissatisfaction with the economic status quo. It responds to rapid economic change that heightens insecurity.

These economic developments, Eichengreen shows, give rise to populist reactions when they highlight the divergent interests of the people and the elite. But populism is also a protest against the declining influence of the traditions, beliefs, and community of once-dominant groups. It is a reaction against the challenge posed by immigrants and minorities to the people as a homogeneous, well-defined entity. Populists invoke nationalism and criticize politicians who embrace diversity, open borders, and equal rights. Populism has particular appeal, Eichengreen shows, when these identity politics and economic grievances come together.