Trust Me! I am a European Central Banker

Dirk Bursian and Sven Fürth

Journal of Money, Credit and Banking, 2015, vol. 47, issue 8, 1503-1530

Abstract: In the aftermath of the financial crisis, the European Central Bank (ECB) has experienced an unprecedented deterioration in the level of trust. This raises the question as to what factors determine trust in central banking. We use a unique cross‐country data set that includes a rich set of socioeconomic characteristics and supplement it with variables meant to reflect a country's macroeconomic condition. We find that besides individual socioeconomic characteristics, macroeconomic conditions play a crucial role in the trust‐building process. Our results suggest that agents are boundedly rational in the trust‐building process and that current ECB market operations may even be beneficial for trust in the ECB in the long run.

Date: 2015
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https://doi.org/10.1111/jmcb.12282

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Working Paper: Trust me! I am a European Central Banker (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:47:y:2015:i:8:p:1503-1530

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