The Impact of Memories of High Inflation on Households’ Trust in Currencies

Elisabeth Beckmann and Thomas Scheiber ()
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Thomas Scheiber: Oesterreichische Nationalbank, Foreign Research Division, http://www.oenb.at

Focus on European Economic Integration, 2012, issue 4, 80-93

Abstract: Many Central, Eastern and Southeastern European (CESEE) economies experienced periods of hyperinflation during transition. Given the importance of trust for households’ financial decision making, we analyze how memories of high inflation influence people’s trust in currencies. Individuals who have lived through periods of economic turbulence are more likely to perceive the euro as more trustworthy than the local currency. Individuals who have experienced hyperinflation retain an inclination for a safe haven currency and remain more alert to economic turbulence and prone to distrust currencies in general.

Keywords: Trust in currencies, euroization, financial crisis, survey data; Central, Eastern and Southeastern Europe (search for similar items in EconPapers)
JEL-codes: D03 D14 D83 D84 G01 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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