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Trust in Public Institutions over the Business Cycle

Betsey Stevenson () and Justin Wolfers ()

No 16891, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: D72 E32 E65 K0 O4 P52 Z13 (search for similar items in EconPapers)
Date: 2011-03
Note: EFG LS PE POL
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Published as Betsey Stevenson & Justin Wolfers, 2011. "Trust in Public Institutions over the Business Cycle," American Economic Review, American Economic Association, vol. 101(3), pages 281-87, May.

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