Trust in Public Institutions over the Business Cycle

Justin Wolfers and Betsey Stevenson

No 8308, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We document that trust in public institutions--and particularly trust in banks, business and government--has declined over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear legacy of the Great Recession, and those countries whose unemployment grew the most suffered the biggest loss in confidence in institutions, particularly in trust in government and the financial sector. Finally, analysis of several repeated cross-sections of confidence within U.S. states yields similar qualitative patterns, but much smaller magnitudes in response to state-specific shocks.

Keywords: Banks; Big business; Confidence; Congress; Courts; Institutions; Media; Survey data; Trust (search for similar items in EconPapers)
JEL-codes: D72 E32 E65 K0 P52 Z13 (search for similar items in EconPapers)
Date: 2011-04
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Citations: View citations in EconPapers (118)

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Related works:
Journal Article: Trust in Public Institutions over the Business Cycle (2011)
Working Paper: Trust in Public Institutions over the Business Cycle (2011)
Working Paper: Trust in Public Institutions over the Business Cycle (2011)
Working Paper: Trust in public institutions over the business cycle (2011)
Working Paper: Trust in Public Institutions over the Business Cycle (2011)
Working Paper: Trust in Public Institutions over the Business Cycle (2011)
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