Explaining central bank trust in an inflation-targeting country: the case of the Reserve Bank of New Zealand

Bernd Hayo and Florian Neumeier ()

Oxford Economic Papers, 2021, vol. 73, issue 1, 27-48

Abstract: Employing data from a representative population survey conducted in New Zealand in 2016, this paper examines factors that influence, or are at least associated with, public trust in the Reserve Bank of New Zealand (RBNZ). The large number of specifically designed questions allows the study of the relationship between six groups of variables and RBNZ trust: (i) economic situation, (ii) monetary policy knowledge, (iii) non-specific trust, (iv) interest and information search, (v) politicians and government, and (vi) socio-demographic indicators. Using ordered logit models, we find that respondents who put more trust in RBNZ are financially satisfied, have more objective and subjective knowledge about the RBNZ, have higher trust in government institutions, are interested in the RBNZ, are older, and are self-employed. The reverse impact is found for those who do not acquire information about the RBNZ and believe that politicians foster the long-term well-being of their country. Institutional trust has the greatest economic impact.

JEL-codes: E52 E58 Z1 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (11)

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Working Paper: Explaining Central Bank Trust in an Inflation Targeting Country: The Case of the Reserve Bank of New Zealand (2017)
Working Paper: Explaining Central Bank Trust in an Inflation Targeting Country: The Case of the Reserve Bank of New Zealand (2017)
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